-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RTFQ2TR/89hh4jmRjhJst9p555QvrYJ1vnw5InX3Q8WjlmwFNcIvVyrwJXi+15CU o+SRAKLei/NKdYopokrSBg== 0000950129-97-002938.txt : 19970725 0000950129-97-002938.hdr.sgml : 19970725 ACCESSION NUMBER: 0000950129-97-002938 CONFORMED SUBMISSION TYPE: S-4/A PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19970724 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PIONEER AMERICAS ACQUISITION CORP CENTRAL INDEX KEY: 0000944649 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 061420850 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-30683 FILM NUMBER: 97644998 BUSINESS ADDRESS: STREET 1: 700 LOUISIANA ST STREET 2: STE 4200 CITY: HOUSTON STATE: TX ZIP: 77002 MAIL ADDRESS: STREET 1: 700 LOUISIANA ST STREET 2: SUITE 4200 CITY: HOUSTON STATE: TX ZIP: 77002 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PIONEER AMERICAS INC CENTRAL INDEX KEY: 0000944717 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 760280373 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-30683-01 FILM NUMBER: 97644999 BUSINESS ADDRESS: STREET 1: 700 LOUISIANA ST STREET 2: STE 4200 CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7132253831 MAIL ADDRESS: STREET 1: 700 LOUISIANA ST STREET 2: STE 4200 CITY: HOUSTON STATE: TX ZIP: 77002 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PIONEER CHLOR ALKALI CO INC CENTRAL INDEX KEY: 0000944718 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 510302028 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-30683-02 FILM NUMBER: 97645000 BUSINESS ADDRESS: STREET 1: 4200 NATIONSBANK CENTER STREET 2: 700 LOUISIANA STREET CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7132253831 MAIL ADDRESS: STREET 1: 700 LOUISIANA ST STREET 2: STE 4200 CITY: HOUSTON STATE: TX ZIP: 77002 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IMPERIAL WEST CHEMICAL CO CENTRAL INDEX KEY: 0000944719 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 952375683 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-30683-03 FILM NUMBER: 97645001 BUSINESS ADDRESS: STREET 1: 4200 NATIONSBANK CENTER STREET 2: 700 LOUISIANA STREET CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7132253831 MAIL ADDRESS: STREET 1: 700 LOUISIANA ST STREET 2: STE 4200 CITY: HOUSTON STATE: TX ZIP: 77002 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALL PURE CHEMICAL CO CENTRAL INDEX KEY: 0000944720 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 942314942 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-30683-04 FILM NUMBER: 97645002 BUSINESS ADDRESS: STREET 1: 4200 NATIONSBANK CENTER STREET 2: 700 LOUISIANA STREET CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7132253831 MAIL ADDRESS: STREET 1: 700 LOUISIANA ST STREET 2: STE 4200 CITY: HOUSTON STATE: TX ZIP: 77002 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BLACK MOUNTAIN POWER CO CENTRAL INDEX KEY: 0000944721 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 760291143 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-30683-05 FILM NUMBER: 97645003 BUSINESS ADDRESS: STREET 1: 4200 NATIONSBANK CENTER STREET 2: 700 LOUISIANA STREET CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7132253831 MAIL ADDRESS: STREET 1: 700 LOUISIANA ST STREET 2: STE 4200 CITY: HOUSTON STATE: TX ZIP: 77002 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALL PURE CHEMICAL NORTHWEST INC CENTRAL INDEX KEY: 0000944722 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 942714064 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-30683-06 FILM NUMBER: 97645004 BUSINESS ADDRESS: STREET 1: 4200 NATIONSBANK CENTER STREET 2: 700 LOUISIANA STREET CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7132253831 MAIL ADDRESS: STREET 1: 700 LOUISIANA ST STREET 2: STE 4200 CITY: HOUSTON STATE: TX ZIP: 77002 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PIONEER CHLOR ALKALI INTERNATIONAL INC CENTRAL INDEX KEY: 0000944723 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 980118164 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-30683-07 FILM NUMBER: 97645005 BUSINESS ADDRESS: STREET 1: 4200 NATIONSBANK CENTER STREET 2: 700 LOUISIANA STREET CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7132253831 MAIL ADDRESS: STREET 1: 700 LOUISIANA ST STREET 2: STE 4200 CITY: HOUSTON STATE: TX ZIP: 77002 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GOW CORP CENTRAL INDEX KEY: 0000944724 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 880336831 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-30683-08 FILM NUMBER: 97645006 BUSINESS ADDRESS: STREET 1: 4200 NATIONSBANK CENTER STREET 2: 700 LOUISIANA STREET CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7132253831 MAIL ADDRESS: STREET 1: 700 LOUISIANA ST STREET 2: STE 4200 CITY: HOUSTON STATE: TX ZIP: 77002 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TC HOLDINGS INC CENTRAL INDEX KEY: 0001041860 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 860311265 STATE OF INCORPORATION: NM FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-30683-09 FILM NUMBER: 97645007 BUSINESS ADDRESS: STREET 1: 700 LOUISIANA ST STREET 2: STE 4200 CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7132253831 MAIL ADDRESS: STREET 1: 700 LOUISIANA ST STREET 2: STE 4200 CITY: HOUSTON STATE: TX ZIP: 77002 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TC PRODUCTS INC CENTRAL INDEX KEY: 0001041861 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 911536884 STATE OF INCORPORATION: NM FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-30683-10 FILM NUMBER: 97645008 BUSINESS ADDRESS: STREET 1: 700 LOUISIANA ST STREET 2: STE 4200 CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7132253831 MAIL ADDRESS: STREET 1: 700 LOUISIANA ST STREET 2: STE 4200 CITY: HOUSTON STATE: TX ZIP: 77002 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PIONEER EAST INC CENTRAL INDEX KEY: 0001041862 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 510375981 STATE OF INCORPORATION: NM FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-30683-11 FILM NUMBER: 97645009 BUSINESS ADDRESS: STREET 1: 700 LOUISIANA ST STREET 2: STE 4200 CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7132253831 MAIL ADDRESS: STREET 1: 700 LOUISIANA ST STREET 2: STE 4200 CITY: HOUSTON STATE: TX ZIP: 77002 S-4/A 1 PIONEER AMERICAS ACQUISITION CORP. (AMEND. #1) 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 24, 1997 REGISTRATION NO. 333-30683 ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------- AMENDMENT NO. 1 TO FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 PIONEER AMERICAS ACQUISITION CORP. (Exact name of registrant as specified in its charter) DELAWARE 2812 06-1420850 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.) PIONEER AMERICAS, INC. DELAWARE 76-0280373 PIONEER CHLOR ALKALI COMPANY, INC. DELAWARE 51-0302028 IMPERIAL WEST CHEMICAL CO. NEVADA 95-2375683 ALL-PURE CHEMICAL CO. CALIFORNIA 94-2314942 BLACK MOUNTAIN POWER COMPANY TEXAS 76-0291143 ALL-PURE CHEMICAL NORTHWEST, INC. WASHINGTON 94-2714064 PIONEER CHLOR ALKALI INTERNATIONAL, BARBADOS 98-0118164 INC. NEVADA 88-0336831 G.O.W. CORPORATION DELAWARE 51-0375981 PIONEER (EAST), INC. NEW MEXICO 86-0311265 T.C. HOLDINGS, INC. WASHINGTON 91-1536884 T.C. PRODUCTS, INC. (State or other jurisdiction of (I.R.S. Employer (Exact name of registrants as incorporation or organization) Identification No.) specified in their charters)
--------------- 4200 NATIONSBANK CENTER, 700 LOUISIANA STREET, HOUSTON, TEXAS 77002, (713) 225-3831 (Address, including zip code, and telephone number, including area code, of registrants' principal executive offices) --------------- KENT R. STEPHENSON, ESQ. PIONEER AMERICAS ACQUISITION CORP. 4200 NATIONSBANK CENTER 700 LOUISIANA STREET HOUSTON, TEXAS 77002 (713) 225-3831 (Name, address, including zip code, and telephone number, including area code, of agent for service) --------------- with a copy to: CORNELIUS T. FINNEGAN III, ESQ. WILLKIE FARR & GALLAGHER ONE CITICORP CENTER 153 EAST 53RD STREET NEW YORK, NEW YORK 10022 (212) 821-8000 --------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE PUBLIC: As soon as practicable after this Registration Statement becomes effective. If any of the securities being registered on this Form are to be offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. [ ] --------------- The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. ================================================================================ 2 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS. PAAC, which is a Delaware corporation, is empowered by the Delaware General Corporation Law, subject to the procedures and limitations stated therein, to indemnify any person against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with any threatened, pending or completed action, suit or proceeding in which such person is made a party by reason of his being or having been a director, officer, employee or agent of PAAC. The statute provides that indemnification pursuant to its provisions is not exclusive of other rights of indemnification to which a person may be entitled under any by-law, agreement, vote of stockholders or disinterested directors, or otherwise. The Certificate of Incorporation and by-laws of PAAC provide for indemnification of the directors and officers of such entities to the full extent permitted by the Delaware General Corporation Law. PAAC maintains an insurance policy providing for indemnification of its officers, directors and certain other persons against liabilities and expenses incurred by any of them in certain stated proceedings and under certain stated conditions. ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (a) Exhibits
*2.1 -- Asset Purchase Agreement, dated as of May 14, 1997, by and among OCC Tacoma, Inc. and Pioneer (incorporated by reference to Exhibit 2 to the Company's Current Report on Form 8-K, dated June 17, 1997). *3.1 -- Certificate of Incorporation of PAAC (incorporated by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.2 -- By-laws of PAAC (incorporated by reference to Exhibit 3.2 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.3 -- Certificate of Incorporation of PAI (incorporated by reference to Exhibit 3.3 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.4 -- By-laws of PAI (incorporated by reference to Exhibit 3.4 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.5 -- Certificate of Incorporation of PCAC (incorporated by reference to Exhibit 3.5 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.6 -- By-laws of PCAC (Incorporated by reference to Exhibit 3.6 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.7 -- Certificate of Incorporation of Imperial West (incorporated by reference to Exhibit 3.7 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.8 -- By-laws of Imperial West (incorporated by reference to Exhibit 3.8 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.9 -- Certificate of Incorporation of All-Pure (incorporated by reference to Exhibit 3.9 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995).
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*3.10 -- By-laws of All-Pure (incorporated by reference to Exhibit 3.10 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.11 -- Certificate of Incorporation of Black Mountain Power Company (incorporated by reference to Exhibit 3.11 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.12 -- By-laws of Black Mountain Power Company (incorporated by reference to Exhibit 3.12 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.13 -- Certificate of Incorporation of All-Pure Chemical Northwest, Inc. (incorporated by reference to Exhibit 3.13 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.14 -- By-laws of All-Pure Chemical Northwest, Inc. (incorporated by reference to Exhibit 3.14 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.15 -- Certificate of Incorporation of Pioneer Chlor Alkali International, Inc. (incorporated by reference to Exhibit 3.15 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.16 -- By-laws of Pioneer Chlor Alkali International, Inc. (incorporated by reference to Exhibit 3.16 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.17 -- Certificate of Incorporation of G.O.W. Corporation (incorporated by reference to Exhibit 3.17 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.18 -- By-laws of G.O.W. Corporation (incorporated by reference to Exhibit 3.18 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.19 -- Certificate of Incorporation of Pioneer (East), Inc. *3.20 -- By-laws of Pioneer (East), Inc. *3.21 -- Certificate of Incorporation of T.C. Holdings, Inc. *3.22 -- By-laws of T.C. Holdings, Inc. *3.23 -- Certificate of Incorporation of T.C. Products, Inc. *3.22 -- By-laws of T.C. Products, Inc. *4.1 -- Indenture, dated as of June 17, 1997, by and among PAAC, the Subsidiary Guarantors defined therein and United States Trust Company of New York, as Trustee, relating to $200,000,000 principal amount of 9 1/4% Series A Senior Notes due 2007, including form of Note and Guarantees. *4.2(a) -- Deed of Trust, Assignment of Leases and Rents, Security Agreement, Fixture Filing and Financing Statement by PCAC (Tacoma, Washington). *4.2(b) -- Mortgage, Assignment of Leases and Rents, Security Agreement, Fixture Filing and Financing Statement by PCAC (St. Gabriel, Louisiana). *4.2(c) -- Deed of Trust, Assignment of Leases and Rents, Security Agreement, Fixture Filing and Financing Statement by PCAC (Henderson, Nevada). *4.3(a) -- Term Loan Agreement, dated as of June 17, 1997, among PAAC, Various Financial Institutions, as Lenders, DLJ Capital Funding, Inc., as the Syndication Agent, Salomon Brothers Holding Company Inc, as the Documentation Agent and Bank of America Illinois, as the Administrative Agent (the "Term Loan Agreement").
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*4.3(b) -- Subsidiary Guaranty, dated June 17, 1997, executed by each of the Subsidiaries party thereto, as guarantor, respectively, in favor of the Lenders, guaranteeing the obligations of one another under the Term Loan Agreement. *4.4 -- Security Agreement, dated as of June 17, 1997, among PCAC and United States Trust Company of New York, as Collateral Agent. *4.5 -- Stock Pledge Agreement, dated as of June 17, 1997, among PAI and United States Trust Company of New York, as Collateral Agent. *4.6(a) -- Loan and Security Agreement, dated as of June 17, 1997, by and among PAAC, Bank of America Illinois, as Agent and Lender and the other Lenders party thereto (the "Revolving Loan Agreement"). *4.6(b) -- Master Corporate Guaranty, dated June 17, 1997, executed by each of the Subsidiaries party thereto, as guarantor, respectively, in favor of Bank of America Illinois, as Agent, for the ratable benefit of the Lenders, guaranteeing the obligations of one another under the Revolving Loan Agreement. *4.6(c) -- Master Security Agreement, dated June 17, 1997, executed by each of the Subsidiaries party thereto, as debtor, respectively, in favor of Bank of America Illinois, as Agent, for the ratable benefit of the lenders. *4.7 -- Intercreditor and Collateral Agency Agreement, dated as of June 17, 1997 by and among United States Trust Company of New York, as Trustee and Collateral Agent, Bank of America Illinois, as Agent, PAAC, PAI and PCAC. *4.8 -- Exchange and Registration Rights Agreement, dated as of June 17, 1997, by and among PAAC, the Subsidiary Guarantors and the Initial Purchasers. 5.1 -- Opinion of Willkie Farr & Gallagher. 5.2 -- Opinion of Kent R. Stephenson, Esq. 8.1 -- Opinion of Willkie Farr & Gallagher with respect to certain tax matters. *10.1 -- Contingent Payment Agreement, dated as of April 20, 1995, by and among Pioneer (formerly, GEV corporation), PAAC and the Sellers defined therein (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Pioneer, dated April 20, 1995). *10.2 -- Tax Sharing Agreement, dated as of April 20, 1995, by and among Pioneer, PAAC and the Subsidiary Guarantors defined therein (incorporated by reference to Exhibit 10.3 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *10.3 -- Pioneer Companies, Inc. 1995 Stock Incentive Plan (incorporated by reference to Exhibit 10.4 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *10.4 -- Pioneer Companies, Inc. Key Executive Stock Grant Plan (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of Pioneer for the quarterly period ended June 30, 1996). *10.5 -- Pioneer Chlor Alkali Company, Inc. Supplemental Retirement Plan (incorporated by reference to Exhibit 10.5 to the Annual Report on Form 10-K of Pioneer for the fiscal year ended December 31, 1995). *10.6 -- Employment Agreement, dated as of April 20, 1995, between Pioneer and Richard C. Kellogg, Jr. (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of Pioneer for the quarterly period ended June 30, 1995).
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*10.7 -- Employment Agreement, dated November 1, 1992, and First Amendment to Employment Agreement, dated as of April 20, 1995, between Pioneer Chlor Alkali Company, Inc. and Paul J. Kienholz (incorporated by reference to Exhibit 10.7 to Pioneer's Annual Report on Form 10-K for the year ended December 31, 1995). *10.8 -- Employment Agreement, dated April 20, 1995, between Pioneer Americas, Inc. and James E. Glattly (incorporated by reference to Exhibit 10.8 to Pioneer's Annual Report on Form 10-K for the year ended December 31, 1995). *10.9 -- Employment Agreement, dated April 20, 1995, between Pioneer Americas, Inc. and Verrill M. Norwood, Jr. (incorporated by reference to Exhibit 10.9 to Pioneer's Annual Report on Form 10-K for the year ended December 31, 1995). *10.10 -- Executive Employment Agreement, dated January 4, 1997, between Pioneer Companies, Inc. and Michael J. Ferris (incorporated by reference to Exhibit 10.10 to the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 1996). *10.11 -- Stock Purchase Agreement, dated January 4, 1997, between Pioneer Companies, Inc. and Michael J. Ferris (incorporated by reference to Exhibit 10.11 to the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 1996). *10.12 -- Non-Qualified Stock Option Agreement, dated January 4, 1997, between Pioneer Companies, Inc. and Michael J. Ferris (incorporated by reference to Exhibit 10.12 to the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 1996). 10.13 -- Chlorine and Caustic Soda Sales Agreement, dated as of June 17, 1997, between Occidental Chemical Corporation and PCAC. 10.14 -- Chlorine Purchase Agreement, dated as of June 17, 1997, between OCC Tacoma, Inc. and PCAC. +10.15 -- Environmental Operating Agreement, dated as of June 17, 1997, between OCC Tacoma and PCAC. *12.1 -- Statement Regarding Computation of Ratio of Earnings to Fixed Charges. *16.1 -- Letter from Ernst & Young LLP regarding change in independent accountants (incorporated by reference to Exhibit 16.1 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *21.1 -- Subsidiaries of the Registrants. *23.1 -- Independent Auditors' Consent of Deloitte & Touche LLP. *23.2 -- Independent Auditors' Consent of Ernst & Young LLP. *23.3 -- Independent Auditors' Consent of Piercy, Bowler, Taylor & Kern. *23.4 -- Independent Public Accountants' Consent of Arthur Andersen LLP. 23.5 -- Consents of Willkie Farr & Gallagher (included in their opinions filed as Exhibits 5.1 and 8.1). 23.6 -- Consent of Kent R. Stephenson, Esq. (included in his opinion filed as Exhibit 5.2). *24.1 -- Powers of Attorney (included in the signature pages hereto). *25.1 -- Statement on Form T-1 of Eligibility of Trustee. *99.1 -- Form of Letter of Transmittal. *99.2 -- Form of Notice of Guaranteed Delivery. *99.3 -- Form of Letter to Clients. *99.4 -- Form of Letter to Nominees.
II-4 6 - --------------- * Previously filed. + Confidential treatment has been requested for portions of this agreement. (b) Financial Statement Schedules: SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS. All other schedules have been omitted because they are not applicable or not required or the required information is included in the financial statements or notes thereto. ITEM 22. UNDERTAKINGS. The undersigned Registrants hereby undertake that, for purposes of determining any liability under the Securities Act, each filing of PAAC's annual report pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of Registrants pursuant to the provisions, described under Item 20 above, or otherwise, the Registrants have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrants of expenses incurred or paid by a director, officer or controlling person of the Registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrants will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The undersigned Registrants hereby undertake that: (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. The undersigned Registrants hereby undertake to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. The undersigned Registrants hereby undertake to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in this Registration Statement when it became effective. II-5 7 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on the 24th day of July, 1997. PIONEER AMERICAS ACQUISITION CORP. By: /s/ PHILIP J. ABLOVE ---------------------------------- Name: Philip J. Ablove Title: Vice President Pursuant to the requirements of the Securities Act of 1933, this amendment to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- * President, Chief Executive Officer July 24, 1997 - ----------------------------------------------------- and Director (principal executive Michael J. Ferris officer) /s/ PHILIP J. ABLOVE Vice President, Chief Financial July 24, 1997 - ----------------------------------------------------- Officer and Director (principal Philip J. Ablove financial officer) * Controller (principal accounting July 24, 1997 - ----------------------------------------------------- officer) John R. Beaver * Director July 24, 1997 - ----------------------------------------------------- William R. Berkley * Director July 24, 1997 - ----------------------------------------------------- Andrew M. Bursky * Director July 24, 1997 - ----------------------------------------------------- Donald J. Donahue * Director July 24, 1997 - ----------------------------------------------------- Richard C. Kellogg, Jr. * Director July 24, 1997 - ----------------------------------------------------- Paul J. Kienholz * Director July 24, 1997 - ----------------------------------------------------- Jack H. Nusbaum * Director July 24, 1997 - ----------------------------------------------------- Thomas H. Schnitzius *By: /s/ PHILIP J. ABLOVE ------------------------------------------------ Philip J. Ablove Attorney-in-Fact
II-6 8 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on the 24th day of July, 1997. PIONEER AMERICAS, INC. By: /s/ KENT R. STEPHENSON ---------------------------------- Name: Kent R. Stephenson Title: Vice President Pursuant to the requirements of the Securities Act of 1933, this amendment to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- * Chairman of the Board and President July 24, 1997 - ----------------------------------------------------- (principal executive officer) Michael J. Ferris * Vice President, Chief Financial July 24, 1997 - ----------------------------------------------------- Officer, Treasurer and Director Philip J. Ablove (principal financial officer) * Controller (principal accounting July 24, 1997 - ----------------------------------------------------- officer) John R. Beaver * Director July 24, 1997 - ----------------------------------------------------- William L. Mahone *By: /s/ KENT R. STEPHENSON ------------------------------------------------ Kent R. Stephenson Attorney-in-Fact
II-7 9 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on the 24th day of July, 1997. PIONEER CHLOR ALKALI COMPANY, INC. By: /s/ KENT R. STEPHENSON ---------------------------------- Name: Kent R. Stephenson Title: Vice President Pursuant to the requirements of the Securities Act of 1933, this amendment to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- * President and Director (principal July 24, 1997 - ----------------------------------------------------- executive officer) James E. Glattly * Vice President and Chief Financial July 24, 1997 - ----------------------------------------------------- Officer and Director (principal Philip J. Ablove financial officer) * Controller (principal accounting July 24, 1997 - ----------------------------------------------------- officer) John R. Beaver * Chairman of the Board July 24, 1997 - ----------------------------------------------------- Michael J. Ferris * Director July 24, 1997 - ----------------------------------------------------- William L. Mahone *By: /s/ KENT R. STEPHENSON ------------------------------------------------ Kent R. Stephenson Attorney-in-Fact
II-8 10 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on the 24th day of July, 1997. IMPERIAL WEST CHEMICAL CO. By: /s/ KENT R. STEPHENSON ---------------------------------- Name: Kent R. Stephenson Title: Vice President Pursuant to the requirements of the Securities Act of 1933, this amendment to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- * President and Director (principal July 24, 1997 - ----------------------------------------------------- executive officer) James M. Wingard * Vice President and Chief Financial July 24, 1997 - ----------------------------------------------------- Officer and Director (principal Philip J. Ablove financial officer) * Controller (principal accounting July 24, 1997 - ----------------------------------------------------- officer) John R. Beaver * Chairman of the Board July 24, 1997 - ----------------------------------------------------- Michael J. Ferris * Director July 24, 1997 - ----------------------------------------------------- William L. Mahone *By: /s/ KENT R. STEPHENSON ------------------------------------------------ Kent R. Stephenson Attorney-in-Fact
II-9 11 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on the 24th day of July, 1997. ALL-PURE CHEMICAL CO. By: /s/ KENT R. STEPHENSON ---------------------------------- Name: Kent R. Stephenson Title: Vice President Pursuant to the requirements of the Securities Act of 1933, this amendment to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- * President and Director (principal July 24, 1997 - ----------------------------------------------------- executive officer) Ronald E. Ciora * Vice President and Chief Financial July 24, 1997 - ----------------------------------------------------- Officer and Director (principal Philip J. Ablove financial officer) * Controller (principal accounting July 24, 1997 - ----------------------------------------------------- officer) John R. Beaver * Chairman of the Board July 24, 1997 - ----------------------------------------------------- Michael J. Ferris * Director July 24, 1997 - ----------------------------------------------------- William L. Mahone *By: /s/ KENT R. STEPHENSON ------------------------------------------------ Kent R. Stephenson Attorney-in-Fact
II-10 12 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on the 24th day of July, 1997. BLACK MOUNTAIN POWER COMPANY By: /s/ KENT R. STEPHENSON ---------------------------------- Name: Kent R. Stephenson Title: Vice President Pursuant to the requirements of the Securities Act of 1933, this amendment to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- * President and Director (principal July 24, 1997 - ----------------------------------------------------- executive officer) Terry K. Graves * Vice President and Chief Financial July 24, 1997 - ----------------------------------------------------- Officer and Director (principal Philip J. Ablove financial officer) * Controller (principal accounting July 24, 1997 - ----------------------------------------------------- officer) John R. Beaver * Chairman of the Board July 24, 1997 - ----------------------------------------------------- Michael J. Ferris * Director July 24, 1997 - ----------------------------------------------------- James E. Glattly *By: /s/ KENT R. STEPHENSON ------------------------------------------------ Kent R. Stephenson Attorney-in-Fact
II-11 13 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on the 24th day of July, 1997. ALL-PURE CHEMICAL NORTHWEST, INC. By: /s/ KENT R. STEPHENSON ---------------------------------- Name: Kent R. Stephenson Title: Vice President Pursuant to the requirements of the Securities Act of 1933, this amendment to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- * President and Director (principal July 24, 1997 - ----------------------------------------------------- executive officer) Ronald E. Ciora * Vice President and Chief Financial July 24, 1997 - ----------------------------------------------------- Officer and Director (principal Philip J. Ablove financial officer) * Controller (principal accounting July 24, 1997 - ----------------------------------------------------- officer) John R. Beaver * Chairman of the Board July 24, 1997 - ----------------------------------------------------- Michael J. Ferris *By: /s/ KENT R. STEPHENSON ------------------------------------------------ Kent R. Stephenson Attorney-in-Fact
II-12 14 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on the 24th day of July, 1997. PIONEER CHLOR ALKALI INTERNATIONAL, INC. By: /s/ KENT R. STEPHENSON ---------------------------------------- Name: Kent R. Stephenson Title: Vice President Pursuant to the requirements of the Securities Act of 1933, this amendment to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- * Chairman of the Board (principal July 24, 1997 - ----------------------------------------------------- executive officer) Michael J. Ferris * Vice President (principal financial July 24, 1997 - ----------------------------------------------------- officer) Philip J. Ablove * Controller (principal accounting July 24, 1997 - ----------------------------------------------------- officer) John R. Beaver * Director July 24, 1997 - ----------------------------------------------------- David F. Callaghan * Director July 24, 1997 - ----------------------------------------------------- James A. Fields * Director July 24, 1997 - ----------------------------------------------------- David A. Leslie *By: /s/ KENT R. STEPHENSON ------------------------------------------------ Kent R. Stephenson Attorney-in-Fact
II-13 15 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on the 24th day of July, 1997. G. O. W. CORPORATION By: /s/ KENT R. STEPHENSON ---------------------------------- Name: Kent R. Stephenson Title: Vice President Pursuant to the requirements of the Securities Act of 1933, this amendment to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- * President and Director (principal July 24, 1997 - ----------------------------------------------------- executive officer) Terry K. Graves * Vice President and Chief Financial July 24, 1997 - ----------------------------------------------------- Officer (principal financial Philip J. Ablove officer) * Controller (principal accounting July 24, 1997 - ----------------------------------------------------- officer) John R. Beaver *By: /s/ KENT R. STEPHENSON ------------------------------------------------ Kent R. Stephenson Attorney-in-Fact
II-14 16 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on the 24th day of July, 1997. PIONEER (EAST), INC. By: /s/ KENT R. STEPHENSON ---------------------------------- Name: Kent R. Stephenson Title: President Pursuant to the requirements of the Securities Act of 1933, this amendment to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ KENT R. STEPHENSON President, Secretary and Chairman of July 24, 1997 - ----------------------------------------------------- the Board (principal executive Kent R. Stephenson officer) * Treasurer and Director (principal July 24, 1997 - ----------------------------------------------------- financial and accounting officer) Robert C. Williams * Director July 24, 1997 - ----------------------------------------------------- Victoria L. Garrett *By: /s/ KENT R. STEPHENSON ------------------------------------------------ Kent R. Stephenson Attorney-in-Fact
II-15 17 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on the 24th day of July, 1997. T.C. HOLDINGS, INC. By: /s/ KENT R. STEPHENSON ---------------------------------- Name: Kent R. Stephenson Title: Vice President Pursuant to the requirements of the Securities Act of 1933, this amendment to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- * President and Director (principal July 24, 1997 - ----------------------------------------------------- executive officer) Ronald E. Ciora * Vice President and Chief Financial July 24, 1997 - ----------------------------------------------------- Officer and Director (principal Philip J. Ablove financial officer) * Controller (principal accounting July 24, 1997 - ----------------------------------------------------- officer) John R. Beaver * Chairman of the Board July 24, 1997 - ----------------------------------------------------- Michael J. Ferris * Director July 24, 1997 - ----------------------------------------------------- William L. Mahone *By: /s/ KENT R. STEPHENSON ------------------------------------------------ Kent R. Stephenson Attorney-in-Fact
II-16 18 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on the 24th day of July, 1997. T.C. PRODUCTS, INC. By: /s/ KENT R. STEPHENSON ---------------------------------- Name: Kent R. Stephenson Title: Vice President Pursuant to the requirements of the Securities Act of 1933, this amendment to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- * President and Director (principal July 24, 1997 - ----------------------------------------------------- executive officer) Ronald E. Ciora * Vice President and Chief Financial July 24, 1997 - ----------------------------------------------------- Officer and Director (principal Philip J. Ablove financial officer) * Controller (principal accounting July 24, 1997 - ----------------------------------------------------- officer) John R. Beaver * Chairman of the Board July 24, 1997 - ----------------------------------------------------- Michael J. Ferris * Director July 24, 1997 - ----------------------------------------------------- William L. Mahone *By: /s/ KENT R. STEPHENSON ------------------------------------------------ Kent R. Stephenson Attorney-in-Fact
II-17 19 EXHIBIT INDEX
EXHIBIT DESCRIPTION ------- ----------- *2.1 -- Asset Purchase Agreement, dated as of May 14, 1997, by and among OCC Tacoma, Inc. and Pioneer (incorporated by reference to Exhibit 2 to the Company's Current Report on Form 8-K, dated June 17, 1997). *3.1 -- Certificate of Incorporation of PAAC (incorporated by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.2 -- By-laws of PAAC (incorporated by reference to Exhibit 3.2 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.3 -- Certificate of Incorporation of PAI (incorporated by reference to Exhibit 3.3 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.4 -- By-laws of PAI (incorporated by reference to Exhibit 3.4 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.5 -- Certificate of Incorporation of PCAC (incorporated by reference to Exhibit 3.5 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.6 -- By-laws of PCAC (Incorporated by reference to Exhibit 3.6 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.7 -- Certificate of Incorporation of Imperial West (incorporated by reference to Exhibit 3.7 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.8 -- By-laws of Imperial West (incorporated by reference to Exhibit 3.8 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.9 -- Certificate of Incorporation of All-Pure (incorporated by reference to Exhibit 3.9 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.10 -- By-laws of All-Pure (incorporated by reference to Exhibit 3.10 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.11 -- Certificate of Incorporation of Black Mountain Power Company (incorporated by reference to Exhibit 3.11 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.12 -- By-laws of Black Mountain Power Company (incorporated by reference to Exhibit 3.12 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.13 -- Certificate of Incorporation of All-Pure Chemical Northwest, Inc. (incorporated by reference to Exhibit 3.13 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.14 -- By-laws of All-Pure Chemical Northwest, Inc. (incorporated by reference to Exhibit 3.14 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995).
20
EXHIBIT DESCRIPTION ------- ----------- *3.15 -- Certificate of Incorporation of Pioneer Chlor Alkali International, Inc. (incorporated by reference to Exhibit 3.15 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.16 -- By-laws of Pioneer Chlor Alkali International, Inc. (incorporated by reference to Exhibit 3.16 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.17 -- Certificate of Incorporation of G.O.W. Corporation (incorporated by reference to Exhibit 3.17 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.18 -- By-laws of G.O.W. Corporation (incorporated by reference to Exhibit 3.18 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *3.19 -- Certificate of Incorporation of Pioneer (East), Inc. *3.20 -- By-laws of Pioneer (East), Inc. *3.21 -- Certificate of Incorporation of T.C. Holdings, Inc. *3.22 -- By-laws of T.C. Holdings, Inc. *3.23 -- Certificate of Incorporation of T.C. Products, Inc. *3.24 -- By-laws of T.C. Products, Inc. *4.1 -- Indenture, dated as of June 17, 1997, by and among PAAC, the Subsidiary Guarantors defined therein and United States Trust Company of New York, as Trustee, relating to $200,000,000 principal amount of 9 1/4% Series A Senior Notes due 2007, including form of Note and Guarantees. *4.2(a) -- Deed of Trust, Assignment of Leases and Rents, Security Agreement, Fixture Filing and Financing Statement by PCAC (Tacoma, Washington). *4.2(b) -- Mortgage, Assignment of Leases and Rents, Security Agreement, Fixture Filing and Financing Statement by PCAC (St. Gabriel, Louisiana). *4.2(c) -- Deed of Trust, Assignment of Leases and Rents, Security Agreement, Fixture Filing and Financing Statement by PCAC (Henderson, Nevada). *4.3(a) -- Term Loan Agreement, dated as of June 17, 1997, among PAAC, Various Financial Institutions, as Lenders, DLJ Capital Funding, Inc., as the Syndication Agent, Salomon Brothers Holding Company Inc, as the Documentation Agent and Bank of America Illinois, as the Administrative Agent (the "Term Loan Agreement"). *4.3(b) -- Subsidiary Guaranty, dated June 17, 1997, executed by each of the Subsidiaries party thereto, as guarantor, respectively, in favor of the Lenders, guaranteeing the obligations of one another under the Term Loan Agreement. *4.4 -- Security Agreement, dated as of June 17, 1997, among PCAC and United States Trust Company of New York, as Collateral Agent. *4.5 -- Stock Pledge Agreement, dated as of June 17, 1997, among PAI and United States Trust Company of New York, as Collateral Agent. *4.6(a) -- Loan and Security Agreement, dated as of June 17, 1997, by and among PAAC, Bank of America Illinois, as Agent and Lender and the other Lenders party thereto (the "Revolving Loan Agreement"). *4.6(b) -- Master Corporate Guaranty, dated June 17, 1997, executed by each of the Subsidiaries party thereto, as guarantor, respectively, in favor of Bank of America Illinois, as Agent, for the ratable benefit of the Lenders, guaranteeing the obligations of one another under the Revolving Loan Agreement.
21
EXHIBIT DESCRIPTION ------- ----------- *4.6(c) -- Master Security Agreement, dated June 17, 1997, executed by each of the Subsidiaries party thereto, as debtor, respectively, in favor of Bank of America Illinois, as Agent, for the ratable benefit of the lenders *4.7 -- Intercreditor and Collateral Agency Agreement, dated as of June 17, 1997 by and among United States Trust Company of New York, as Trustee and Collateral Agent, Bank of America Illinois, as Agent, PAAC, PAI and PCAC. *4.8 -- Exchange and Registration Rights Agreement, dated as of June 17, 1997, by and among PAAC, the Subsidiary Guarantors and the Initial Purchasers. 5.1 -- Opinion of Willkie Farr & Gallagher. 5.2 -- Opinion of Kent R. Stephenson, Esq. 8.1 -- Opinion of Willkie Farr & Gallagher with respect to certain tax matters. *10.1 -- Contingent Payment Agreement, dated as of April 20, 1995, by and among Pioneer (formerly, GEV corporation), PAAC and the Sellers defined therein (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Pioneer, dated April 20, 1995). *10.2 -- Tax Sharing Agreement, dated as of April 20, 1995, by and among Pioneer, PAAC and the Subsidiary Guarantors defined therein (incorporated by reference to Exhibit 10.3 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *10.3 -- Pioneer Companies, Inc. 1995 Stock Incentive Plan (incorporated by reference to Exhibit 10.4 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *10.4 -- Pioneer Companies, Inc. Key Executive Stock Grant Plan (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of Pioneer for the quarterly period ended June 30, 1996). *10.5 -- Pioneer Chlor Alkali Company, Inc. Supplemental Retirement Plan (incorporated by reference to Exhibit 10.5 to the Annual Report on Form 10-K of Pioneer for the fiscal year ended December 31, 1995). *10.6 -- Employment Agreement, dated as of April 20, 1995, between Pioneer and Richard C. Kellogg, Jr. (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of Pioneer for the quarterly period ended June 30, 1995). *10.7 -- Employment Agreement, dated November 1, 1992, and First Amendment to Employment Agreement, dated as of April 20, 1995, between Pioneer Chlor Alkali Company, Inc. and Paul J. Kienholz (incorporated by reference to Exhibit 10.7 to Pioneer's Annual Report on Form 10-K for the year ended December 31, 1995). *10.8 -- Employment Agreement, dated April 20, 1995, between Pioneer Americas, Inc. and James E. Glattly (incorporated by reference to Exhibit 10.8 to Pioneer's Annual Report on Form 10-K for the year ended December 31, 1995). *10.9 -- Employment Agreement, dated April 20, 1995, between Pioneer Americas, Inc. and Verrill M. Norwood, Jr. (incorporated by reference to Exhibit 10.9 to Pioneer's Annual Report on Form 10-K for the year ended December 31, 1995). *10.10 -- Executive Employment Agreement, dated January 4, 1997, between Pioneer Companies, Inc. and Michael J. Ferris (incorporated by reference to Exhibit 10.10 to the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 1996).
22
EXHIBIT DESCRIPTION ------- ----------- *10.11 -- Stock Purchase Agreement, dated January 4, 1997, between Pioneer Companies, Inc. and Michael J. Ferris (incorporated by reference to Exhibit 10.11 to the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 1996). *10.12 -- Non-Qualified Stock Option Agreement, dated January 4, 1997, between Pioneer Companies, Inc. and Michael J. Ferris (incorporated by reference to Exhibit 10.12 to the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 1996). 10.13 -- Chlorine and Caustic Soda Sales Agreement, dated as of June 17, 1997, between Occidental Chemical Corporation and PCAC. 10.14 -- Chlorine Purchase Agreement, dated as of June 17, 1997, between OCC Tacoma, Inc. and PCAC. +10.15 -- Environmental Operating Agreement, dated as of June 17, 1997, between OCC Tacoma and PCAC *12.1 -- Statement Regarding Computation of Ratio of Earnings to Fixed Charges. *16.1 -- Letter from Ernst & Young LLP regarding change in independent accountants (incorporated by reference to Exhibit 16.1 to the Company's Registration Statement on Form S-4 (File No. 33-98828) declared effective by the Commission on December 22, 1995). *21.1 -- Subsidiaries of the Registrants. *23.1 -- Independent Auditors' Consent of Deloitte & Touche LLP. *23.2 -- Independent Auditors' Consent of Ernst & Young LLP. *23.3 -- Independent Auditors' Consent of Piercy, Bowler, Taylor & Kern. *23.4 -- Independent Public Accountants' Consent of Arthur Andersen LLP. 23.5 -- Consents of Willkie Farr & Gallagher (included in their opinions filed as Exhibits 5.1 and 8.1). 23.6 -- Consent of Kent R. Stephenson, Esq. (included in his opinion filed as Exhibit 5.2). *24.1 -- Powers of Attorney (included in the signature pages hereto). *25.1 -- Statement on Form T-1 of Eligibility of Trustee. *99.1 -- Form of Letter of Transmittal. *99.2 -- Form of Notice of Guaranteed Delivery. *99.3 -- Form of Letter to Clients. *99.4 -- Form of Letter to Nominees.
- --------------- * Previously filed. + Confidential treatment has been requested for portions of this agreement. EX-5.1 2 OPINION OF WILLKIE FARR & GALLAGHER 1 EXHIBIT 5.1 July 24, 1997 Pioneer Americas Acquisition Corp. 4200 NationsBank Center 700 Louisiana Street Houston, Texas 77002 Re: Registration Statement on Form S-4 (File No. 333-30683) Dear Sirs: We are counsel to Pioneer Americas Acquisition Corp., a Delaware corporation (the "Company"), and its subsidiaries (the "Subsidiary Guarantors" and together with the Company, the "Issuers"), and have acted as such in connection with various legal matters relating to the filing of a Registration Statement on Form S-4 (File No. 333-30683) (the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), covering up to $200,000,000 in aggregate principal amount of 9-1/4% Series B Senior Secured Notes due 2007 (the "Exchange Notes") offered in exchange for up to $200,000,000 in aggregate principal amount of outstanding 9-1/4% Series A Senior Secured Notes due 2007 originally issued and sold in reliance upon an exemption from registration under the Securities Act (the "Original Notes"). The Original Notes were issued under, and the Exchange Notes are to be issued under, the Indenture, dated as of June 17, 1997 (the "Indenture"), among the Issuers and the United States Trust Company of New York, as trustee. The exchange will be made pursuant to an exchange offer (the "Exchange Offer") contemplated by the Registration Statement. Capitalized terms used but not otherwise defined herein shall have the meanings assigned to them in the Registration Statement. In so acting, we have examined copies of such records of the Issuers and such other certificates and documents as we have deemed relevant and necessary for the opinions hereinafter set forth. In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to authentic originals of all documents submitted to us as certified or reproduced copies. We have also assumed the legal capacity of all persons executing such documents and the truth and correctness of any representations or warranties therein contained. As to various questions of fact material to such opinions, we have relied upon certificates of officers of the Issuers and of public officials. 2 Pioneer Americas Acquisition Corp. July 24, 1997 Page 2 Based upon the foregoing, we are of the opinion that: 1. The Company, Pioneer Americas, Inc., Pioneer Chlor Alkali Company, Inc. and Pioneer (East), Inc. are duly formed and validly existing under the laws of the State of Delaware. 2. The execution and delivery of the Indenture has been duly authorized by the Issuers, and the Indenture constitutes a legal, valid and binding obligation of the Issuers, enforceable against the Issuers in accordance with the terms thereof, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance and other similar laws affecting the enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). 3. The Exchange Notes have been duly authorized and, when duly executed by the proper officers of the Company, duly authenticated by the Trustee and issued by the Company in accordance with the terms of the Indenture and the Exchange Offer, will constitute legal, valid and binding obligations of the Company, will be entitled to the benefits of the Indenture and will be enforceable against the Company in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance and other similar laws affecting the enforcement of creditors' rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). 4. The Guarantee have been duly authorized and, when the Exchange Notes have been duly executed and authenticated, and the Guarantees have been duly executed, in accordance with the terms of the Indenture, and the Exchange Notes have been delivered to the holders as described in the Prospectus, the Guarantees will constitute legal, valid and binding obligations of the Subsidiary Guarantors, will be entitled to the benefits of the Indenture and will be enforceable against the Subsidiary Guarantors in accordance with their term, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance and other similar laws affecting the enforcement of creditors' rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). This opinion is limited to the laws of the State of New York, the General Corporation Law of the State of Delaware and the federal 3 Pioneer Americas Acquisition Corp. July 24, 1997 Page 3 laws of the United States of the type typically applicable to transactions contemplated by the Exchange Offer, and we do not express any opinion with respect to the laws of any other country, state or jurisdiction. In rendering our opinions expressed in paragraphs 2, 3 and 4 above, we have relied on the opinion of Kent R. Stephenson, Esq., Vice President, General Counsel and Secretary of the Company, addressed to you and of even date herewith, to the extent our opinions relate to due authorization, execution and delivery of Subsidiary Guarantors not incorporated in the State of Delaware. This opinion letter is limited to the matters stated herein and no opinion is implied or may be inferred beyond the matters expressly stated. This letter speaks only as of the date hereof and is limited to present statutes, regulations and administrative and judicial interpretations. We undertake no responsibility to update or supplement this letter after the date hereof. We consent to being named in the Registration Statement and related Prospectus as counsel who are passing upon the legality of the Exchange Notes for the Company and the Guarantees for the Subsidiary Guarantors and to the reference to our name under the caption "Legal Matters" in such Prospectus. We also consent to your filing copies of this opinion as an exhibit to the Registration Statement or any amendment thereto. Very truly yours, /s/ Willkie Farr & Gallagher EX-5.2 3 OPINION OF KENT R. STEPHENSON, ESQ. 1 EXHIBIT 5.2 July 24, 1997 Pioneer Americas Acquisition Corp. 4200 NationsBank Center 700 Louisiana Street Houston, Texas 77002 Re: Registration Statement on Form S-4 (File No. 333-30683) Dear Sirs: I am Vice President, General Counsel and Secretary of Pioneer Americas Acquisition Corp., a Delaware corporation (the "Company" and together with its subsidiaries, the "Issuers") and have acted as such in connection with various legal matters relating to the filing of a Registration Statement on Form S-4 (File No. 333-30683) (The "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), covering up to $200,000,000 in aggregate principal amount of 9-1/4% Series B Senior Secured Notes due 2007 (the "Exchange Notes") offered in exchange for up to $200,000,000 in aggregate principal amount of outstanding 9-1/4% Series A Senior Secured Notes due 2007 in reliance upon an exemption from registration under the Securities Act (the "Original Notes"). The Original Notes were issued under, and the Exchange Notes are to be issued under, the Indenture, dated as of June 17, 1997, among the Issuers and the United States Trust Company of New York, as trustee. The exchange will be made pursuant to an exchange offer (the "Exchange Offer") contemplated by the Registration Statement. Capitalized terms used but not otherwise defined herein shall have the meanings assigned to them in the Registration Statement. In so acting, I have examined copies of such records of the Issuers and such other certificates and documents as I have deemed relevant and necessary for the opinions hereinafter set forth. In such examination, I have assumed the genuineness of all signatures, the authenticity of all documents submitted to me as originals and the conformity to authentic originals of all documents submitted to me as certified or reproduced copies. I have also assumed the legal capacity of all persons executing such documents and the truth and correctness of any representations or warranties therein contained. As to various questions of 2 Pioneer Americas Acquisition Corp. July 24, 1997 Page 2 fact material to such opinions, I have relied upon certificates of officers of the Issuers and of public officials. Based upon the foregoing, I am of the opinion that: 1. Imperial West Chemical Co., All-Pure Chemical Co., Black Mountain Power Company, All-Pure Chemical Northwest, Inc., Pioneer Chlor Alkali International, Inc., G.O.W. Corporation, T.C. Holdings, Inc. and T.C. Products, Inc. (collectively, the "Non-Delaware Subsidiaries") are duly formed and validly existing under the laws of their respective jurisdictions of incorporation. 2. The Indenture has been duly authorized, executed and delivered by each of the Non-Delaware Subsidiaries. Each of the Exchange Notes and the Guarantees have been duly authorized by each of the Non-Delaware Subsidiaries. This opinion letter is limited to the matters stated herein and no opinion is implied or may be inferred beyond the matters expressly stated. This opinion letter may be relied upon by Willkie Farr & Gallagher in connection with the Exchange Offer. This letter speaks only as of the date hereof and is limited to present statutes, regulations and administrative and judicial interpretations. I undertake no responsibility to update or supplement this letter after the date hereof. I consent to your filing copies of this opinion as an exhibit to the Registration Statement or any amendment thereto. Sincerely, /s/ Kent R. Stephenson Kent R. Stephenson Vice President, General Counsel and Secretary EX-8.1 4 OPINION OF WILLKIE FARR & GALLAGHER RE:TAX MATTERS 1 EXHIBIT 8.1 July 24, 1997 Pioneer Americas Acquisition Corp. 4200 NationsBank Center 700 Louisiana Street Houston, Texas 77002 Re: Registration Statement on Form S-4 (File No. 333-30683) Dear Sirs: We have acted as counsel to Pioneer Americas Acquisition Corp., a Delaware corporation (the "Company"), and its subsidiaries (together with the Company, the "Issuers"), in connection with the filing of a Registration Statement on Form S-4 (File No. 333-30683) (the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), covering up to $200,000,000 in aggregate principal amount of 9-1/4% Series B Senior Secured notes due 2007 (the "Exchange Notes") offered in exchange for up to $200,000,000 in aggregate principal amount of outstanding 9-1/4% Series A Senior Secured Notes due 2007 originally issued and sold in reliance upon an exemption from registration under the Securities Act (the "Original Notes"). In that connection, we have prepared the section entitled "The Exchange Offer - Federal Income Tax Consequences" contained in the Registration Statement. Our opinion is based on the provisions of the Internal Revenue Code of 1986, as amended, regulations under such Code, judicial authority and current administrative rulings and practice, all as of the date of this letter, and all of which may change at any time. Based on the foregoing, it is our opinion that as stated in the above-referenced section of the Registration Statement, the exchange of Original Notes for Exchange Notes by holders will not be a taxable exchange for federal income tax purposes, and holders should not recognize any taxable gain or loss or any interest income as a result of such exchange. We hereby consent to the use of this opinion as Exhibit 8.1 to the Registration Statement and related Prospectus filed with the Securities and Exchange Commission and to the reference to us under the caption "Legal Matters" therein. Very truly yours, /s/ Willkie Farr & Gallagher EX-10.13 5 CHLORINE & CAUSTIC SODA SALES AGREEMENT 1 EXHIBIT 10.13 =============================================================================== CHLORINE AND CAUSTIC SODA SALES AGREEMENT between PIONEER CHLOR ALKALI COMPANY, INC. and OCCIDENTAL CHEMICAL CORPORATION Dated as of June 17, 1997 =============================================================================== 2 TABLE OF CONTENTS
PARTIES AND RECITALS PAGE NUMBER ----------- ARTICLE I DEFINITIONS SECTION 1.1 Definitions................................................1 ARTICLE II COMMITMENTS OF PURCHASE AND SALE SECTION 2.1 Purchase Commitment........................................3 SECTION 2.2 Sales Commitment...........................................4 ARTICLE III QUANTITY SECTION 3.1 National Accounts Contracts Requirements...................4 SECTION 3.2 Notification of Annual Requirements........................5 SECTION 3.3 Priority of Obligations to OxyChem.........................5 ARTICLE IV TERM SECTION 4.1 Term of This Agreement.....................................6 SECTION 4.2 Effect of Modifications of National Account Contracts......6 ARTICLE V PRICE SECTION 5.1 Prices of Chlorine and Caustic Soda........................6 SECTION 5.2 Notification of Price; OxyChem's Payment...................6 SECTION 5.3 Pioneer's Right to Audit...................................8 ARTICLE VI DELIVERY SECTION 6.1 Shipping Instructions......................................8 SECTION 6.2 Title and Risk of Loss.....................................9 SECTION 6.3 Transportation Costs.......................................9 SECTION 6.4 OxyChem's Right to Audit Certain Transportation Charge.....9
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PAGE NUMBER ----------- ARTICLE VII MEASUREMENT SECTION 7.1 Rail Car Delivery..........................................10 SECTION 7.2 Calibration of Measuring Devices...........................10 ARTICLE VIII WARRANTIES; LIMITATIONS OF CLAIMS SECTION 8.1 Pioneer's Warranty.........................................11 SECTION 8.2 Patents....................................................11 SECTION 8.3 Packaging, Uses and Safe Handling..........................11 SECTION 8.4 Emergency Response.........................................11 SECTION 8.5 Quality Claims; Liability..................................11 ARTICLE IX TAXES SECTION 9.1 Responsibility for Taxes...................................12 ARTICLE X LIABILITY AND RESPONSIBILITY SECTION 10.1 Allocation of Liability....................................12 SECTION 10.2 Procedures for Indemnification.............................13 ARTICLE XI EXCUSE OF PERFORMANCE SECTION 11.1 Excuse of Performance......................................14 ARTICLE XII DEFAULT AND REMEDIES SECTION 12.1 Default and Remedies.......................................15 SECTION 12.2 Certain Damages Excluded...................................16 SECTION 12.3 Duty to Mitigate...........................................16
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PAGE NUMBER ----------- ARTICLE XIII MISCELLANEOUS SECTION 13.1 Successors and Assigns.....................................16 SECTION 13.2 Entire Agreement; Amendment................................17 SECTION 13.3 Governing Law..............................................17 SECTION 13.4 Notices....................................................18 SECTION 13.5 Competition; Access to National Account Contracts..........19 SECTION 13.6 Severability...............................................19 SECTION 13.7 Headings...................................................19 SECTION 13.8 Counterparts...............................................19 SECTION 13.9 Construction...............................................19 SECTION 13.10 Third Party Beneficiaries..................................19 SECTION 13.11 Payments...................................................19 SECTION 13.12 Incorporation of Appendices................................19
Appendices iii 5 LIST OF APPENDICES
Appendix Description -------- ----------- Appendix A Caustic Soda Specifications Appendix B Chlorine Specifications Appendix C National Accounts Appendix D National Account Contracts Appendix E Expiration Dates of National Account Contracts Appendix F Chlorine and Caustic Soda Estimates Appendix G Pioneer's Standard Terms and Conditions Appendix H Initial Month Quantities and Shipping Details Appendix I Delivery Performance Standards
iv 6 CHLORINE AND CAUSTIC SODA SALES AGREEMENT THIS CHLORINE AND CAUSTIC SODA SALES AGREEMENT, dated as of the 17th day of June, 1997, is between OCCIDENTAL CHEMICAL CORPORATION, a New York corporation, and PIONEER CHLOR ALKALI COMPANY, INC., a Delaware corporation. WHEREAS, pursuant to the Asset Purchase Agreement (as such term and certain other terms used in this Agreement with initial capital letters are defined or incorporated by reference in Article I), the Parties have provided for the sale by OCC Tacoma, a wholly owned subsidiary of OxyChem, and the purchase by Pioneer, of OCC Tacoma's chloralkali manufacturing facility located at Tacoma, Washington; and WHEREAS, after the sale of the Tacoma Plant to Pioneer, OxyChem will retain a significant national chloralkali manufacturing business, including, without limitation, the right, title and interest of OxyChem in the National Account Contracts in the course of the performance of which OxyChem has utilized chlorine and caustic soda manufactured at the Tacoma Plant; and WHEREAS, after the sale of the Tacoma Plant to Pioneer, OxyChem desires to continue to discharge certain of its obligations pursuant to the National Account Contracts by purchasing certain quantities of chlorine and caustic soda from Pioneer; and WHEREAS, after the sale of the Tacoma Plant to Pioneer, Pioneer desires to deliver and sell, and OxyChem desires to take and pay for, certain quantities of chlorine and caustic soda in order to permit OxyChem to continue to discharge such obligations until the expiration or other termination of the National Account Contracts, as such National Account Contracts are in effect as of the date of this Agreement; and WHEREAS, the Parties are entering into this Agreement in accordance with the provisions of the Asset Purchase Agreement; NOW, THEREFORE, in consideration of the premises and the mutual benefits and agreements hereinafter set forth, the Parties do hereby agree as follows: ARTICLE I DEFINITIONS SECTION 1.1 Definitions. As used in this Agreement, and unless the context requires a different meaning, the following terms have the meanings indicated below (such meanings to be equally applicable to both the singular and the plural forms of the terms defined). Capitalized 1 7 terms not otherwise specifically defined herein shall have the meanings assigned to them in the Asset Purchase Agreement. "Affiliate" means any Person that is an "affiliate" within the meaning of the regulations promulgated under the Securities Act of 1933, as amended, as such regulations and Act shall be amended and in effect on the date of this Agreement. "Agreement" means this Chlorine and Caustic Soda Sales Agreement, as the same may be amended pursuant to the provisions hereof. "Asset Purchase Agreement" means the Asset Purchase Agreement, dated as of May 14, 1997, between OCC Tacoma and Pioneer. "caustic soda" means sodium hydroxide (NaOH) having the specifications set forth in Appendix A to this Agreement and measured in units of dry short tons. "chlorine" means liquid chlorine having the specifications set forth in Appendix B to this Agreement. All references to quantities of chlorine in this Agreement shall be in units of short tons. "Claim" has the meaning specified in Section 10.1. "dry short ton" means 2000 pounds of 50% liquid caustic soda, basis 76% Na(2)O. "Indemnified Party" has the meaning specified in Section 10.2. "Indemnifying Party" has the meaning specified in Section 10.2. "Initial Year" means the period of time from the date of this Agreement until December 31, 1997. "Losses" has the meaning specified in Section 10.1. "month" means a calendar month. "National Accounts" means the companies listed in Appendix C to this Agreement. "National Account Contracts" means the contracts listed in Appendix D to this Agreement. "OCC Tacoma" means OCC Tacoma, Inc., a Delaware corporation. 2 8 "Oxy Accountant" means Arthur Andersen LLP or such other nationally recognized accounting firm as shall be selected by OxyChem. "OxyChem" means Occidental Chemical Corporation, a New York corporation. "Party" means Pioneer or OxyChem, as applicable, and "Parties" means Pioneer and OxyChem. "Person" means any natural person, corporation, limited liability company, partnership, group, joint venture, trust, association or other business enterprise or organization or any government or agency or political subdivision thereof or any other entity. "Pioneer" means Pioneer Chlor Alkali Company, Inc., a Delaware corporation. "Pioneer Accountant" means Deloitte & Touche LLP or such other nationally recognized accounting firm as shall be selected by Pioneer. "Price" means, with respect to each of chlorine and caustic soda, the price thereof determined in accordance with the provisions of Article V. "short ton" means two thousand (2000) pounds. "Superfund Assessment" means the assessment on the production and sale of chlorine or caustic soda imposed pursuant to the Comprehensive Environmental Response, Compensation and Liability Act, as the same may be from time to time amended or reauthorized and in effect. "Tacoma Plant" means the chlor alkali manufacturing facility acquired by Pioneer pursuant to the Asset Purchase Agreement and located at 605 Alexander Avenue, Tacoma, Washington. "Term" has the meaning specified in Section 4.1. "year" or "yearly" means the Initial Year and any calendar year occurring thereafter. ARTICLE II COMMITMENTS OF PURCHASE AND SALE SECTION 2.1 Purchase Commitment. Upon the terms and subject to the conditions set forth in this Agreement, Oxychem agrees to take and purchase from Pioneer, during the Term, the quantities of chlorine and caustic soda as hereinafter described and at the Prices as hereinafter set forth. In the case of the Initial Year or, if the expiration or other termination of any National Account Contract occurs on a date other than the first or last day of a year, then each relevant quantity commitment shall be prorated, as of any date of determination, by multiplying the amount 3 9 of such commitment by a fraction the numerator of which shall be the number of days from such date of determination to (and including) such last day and the denominator of which shall be 365. SECTION 2.2 Sales Commitment. Upon the terms and subject to the conditions set forth in this Agreement, Pioneer agrees to deliver and sell to OxyChem, during the Term, the quantities of chlorine and caustic soda as hereinafter described and at the Prices as hereinafter set forth. In the case of the Initial Year or, if the expiration or other termination of any National Account Contract occurs on a date other than the first or last day of a year, then each relevant quantity commitment shall be prorated, as of any date of determination, by multiplying the amount of such commitment by a fraction the numerator of which shall be the number of days from such date of determination to (and including) such last day and the denominator of which shall be 365. ARTICLE III QUANTITY SECTION 3.1 National Account Contracts Requirements. (a) Subject to the provisions of Sections 3.2 and 3.3, OxyChem shall take and purchase from Pioneer, and Pioneer shall deliver and sell to OxyChem, each year during the Term the quantities of chlorine and caustic soda that are required in order for OxyChem to exercise its rights and to discharge its obligations to each of the National Accounts pursuant to the provisions of the National Account Contracts as in effect, and for the term of such National Account Contract remaining, on the date of this Agreement, and which, but for the sale of the Tacoma Plant to Pioneer, OxyChem would have supplied directly from production at the Tacoma Plant (determined consistently with OxyChem's documented historical manner of discharging its supply obligation in respect of such National Account Contract). (b) Subject to the provisions of Sections 3.2 and 3.3, the quantities of chlorine and caustic soda that OxyChem may also take and purchase from Pioneer, and that Pioneer may also deliver and sell to OxyChem, shall include, in addition to the quantities described in paragraph (a) of this Section 3.1, any additional quantities of chlorine and caustic soda which any National Account may have an option to call from OxyChem pursuant to the provisions of the relevant National Account Contract and which, but for the sale of the Tacoma Plant to Pioneer, OxyChem would have supplied directly from production at the Tacoma Plant (determined consistently with OxyChem's documented historical manner of discharging its supply obligation in respect of such National Account Contract). OxyChem will notify Pioneer of any volumes which will be requested pursuant to this paragraph (b) not less than fifteen (15) days prior to the requested date of shipment. (c) Upon the date specified in Appendix E for each National Account Contract or the earlier termination of a National Account Contract, Pioneer shall have no further obligation to supply any amounts of chlorine or caustic soda to OxyChem attributable to such National 4 10 Account Contract. The dates specified in Appendix E are the current expiration dates for each National Account Contract listed. SECTION 3.2 Notification of Annual Requirements. (a) Not less than one hundred eighty (180) days prior to the end of each year during the Term (other than the Initial Year), OxyChem shall submit to Pioneer, in writing, a non-binding forecast of that portion of OxyChem's requirements for chlorine and caustic soda required pursuant to the provisions of the National Account Contracts for the following year to be supplied hereunder. Such forecast shall represent OxyChem's best effort to accurately predict chlorine and caustic soda sales pursuant to the terms of the National Account Contracts. (b) The estimated quantities of chlorine and caustic soda to be supplied by Pioneer for each of the National Accounts during the Initial Year are specified in Appendix F to this Agreement. In addition, with respect to each National Account Contract, Appendix F sets forth the (i) maximum and minimum volumes, and (ii) volumes subject to be called by OxyChem. OxyChem agrees that its requirements in any subsequent years shall not exceed one hundred twenty-five percent (125%) of the volumes of each of the National Account Contracts for such year, as shown on Appendix F. If in any year during the term of this Agreement, OxyChem shall require a quantity of chlorine or caustic soda in excess of the limitations provided for in this paragraph in order to discharge its obligations under any National Account Contract, OxyChem shall provide to Pioneer written notice of such excess requirement and, within the time period specified by OxyChem in such notice, Pioneer may elect to provide all of such additional quantities to OxyChem pursuant to the provisions of this Agreement. OxyChem shall provide such notice as soon as commercially practicable upon learning of such additional requirements, including a statement of the date (which shall not be less than five (5) days after Pioneer's receipt of such notice) by which Pioneer must notify OxyChem of its determination to supply all of such additional quantities or its determination to forego such additional sales. In the latter case, OxyChem shall have the right to supply such additional quantities from any other source. SECTION 3.3 Priority of Obligations to OxyChem. Pioneer's right and obligation to deliver and sell chlorine and caustic soda to OxyChem pursuant to the provisions of this Agreement, and OxyChem's right and obligation to take and pay for chlorine and caustic soda from Pioneer pursuant to the provisions of this Agreement, shall be subject to allocation by Pioneer in accordance with Pioneer's customary practice as applied to Pioneer's like customers; provided, however, that Pioneer's obligation to provide quantities of chlorine and caustic soda to OxyChem pursuant to the provisions of this Agreement for the Clorox Company National Account, and OxyChem's right to purchase quantities of chlorine and caustic soda from Pioneer pursuant to the provisions of this Agreement for the Clorox Company National Account, shall not be subject to allocation by Pioneer among its other customers or its own internal requirements. 5 11 ARTICLE IV TERM SECTION 4.1 Term of this Agreement. The term (the "Term") of this Agreement shall commence, and this Agreement shall become effective, on the date hereof and shall continue thereafter until the latest date on Appendix E or, if earlier, the date upon which the last of the National Account Contracts shall be terminated. SECTION 4.2 Effect of Modifications of National Account Contracts. No extension, renewal, revision, modification or amendment of any of the National Account Contracts shall have the effect of increasing the obligations of Pioneer under this Agreement. ARTICLE V PRICE SECTION 5.1 Prices of Chlorine and Caustic Soda. (a) Each calendar quarter during the Term, the price, FOB Tacoma, of chlorine sold by Pioneer to OxyChem hereunder, expressed in dollars per short ton, shall be an amount equal to ninety-five percent (95%) of the weighted average price, net of freight charges paid by OxyChem, at which OxyChem sells chlorine to the National Accounts pursuant to the National Account Contracts. The weighted average price calculation for each calendar quarter will use the prices in effect pursuant to each of the National Account Contracts during the immediately preceding calendar quarter. Upon the date specified in Appendix E for each National Account Contract or the earlier termination of a National Account Contract, the volume and price associated with such National Account Contract will be excluded from the calculation of the Price of chlorine. (b) Each calendar quarter during the Term, the price, FOB Tacoma, of caustic soda sold by pioneer to OxyChem hereunder, expressed in dollars per dry short ton, shall be an amount equal to ninety-five percent (95%) of the weighted average price, net of freight and throughput charges paid by OxyChem, at which OxyChem sells caustic soda to the National Accounts pursuant to the National Account Contracts. The weighted average price calculation for each calendar quarter will use the prices in effect pursuant to each of the National Account Contracts during the immediately preceding calendar quarter. Upon the date specified in Appendix E for each National Account Contract or the earlier termination of a National Account Contract, the volume and price associated with such National Account Contract will be excluded from the calculation of the Price of caustic soda. SECTION 5.2 Notification of the Price; OxyChem's Payment. (a) Not later than the twentieth (20th) day of the first month of each calendar quarter during the Term (other than initial calendar quarter), OxyChem shall provide to Pioneer in writing 6 12 the Prices, calculated as provided in Section 5.1, which will be applicable to chlorine and caustic soda to be delivered pursuant to the provisions of this Agreement during such calendar quarter. At all times during the Term, Pioneer shall take such measures, and implement and utilize such procedures, as will ensure that access to the Prices applicable to chlorine and caustic soda sold to OxyChem pursuant to this Agreement(i) will be limited to employees of Pioneer who have a need to know such information for the purpose of discharging Pioneer's financial and accounting obligations, and (ii) will not be provided to (A) any personnel of Pioneer or any of its Affiliates who exercise any pricing, sales or marketing responsibilities for, or on behalf of, Pioneer or any such Affiliate, or (B) any director, officer or employee of Pioneer or any such Affiliates who does not have a need to know such Prices for the purpose of discharging Pioneer's financial and accounting obligations. (b) The foregoing obligations of confidence, nondisclosure and non-use shall not apply to any information that (i) was in the public domain at the time of disclosure by OxyChem or any of its Affiliates to Pioneer; (ii) enters the public domain through no fault of Pioneer; (iii) was communicated to Pioneer by any other Person free of any obligation of confidence; or (iv) was developed by officers, employees or agents of or consultants to Pioneer independently of and without reference to the proprietary information of OxyChem. Information, including, without limitation, the Price of chlorine and caustic soda sold hereunder, shall not be deemed to be within the public domain, or communicated free of any obligation of confidence, for purposes of the provisions of this paragraph simply because it is known by one or more of the National Accounts in the course of performing the National Account Contracts. (c) The Price of chlorine which shall be in effect for the initial calendar quarter, or portion thereof if this Agreement is not effective as of the first day of the initial calendar quarter, shall be calculated as provided in Section 5.1, using the prices in effect pursuant to the National Account Contracts during the calendar quarter immediately preceding the calendar quarter in which this Agreement shall become effective. (d) The Price of caustic soda which shall be in effect for the initial calendar quarter, or portion thereof if this Agreement is not effective as of the first day of the initial calendar quarter, shall be calculated as provided in Section 5.1, using the prices in effect pursuant to the National Account Contracts during the calendar quarter immediately preceding the calendar quarter in which this Agreement shall become effective. (e) Pioneer shall invoice OxyChem for each shipment of chlorine and caustic soda delivered. The prices reflected in the invoice shall be determined as of the date of shipment and shall be the Prices for chlorine and caustic soda designated by OxyChem for the then current calendar quarter. Payment terms for Pioneer's invoice shall be net thirty (30) days from the date of the applicable invoice with OxyChem to pay interest (not to exceed the maximum lawful rate) on any amounts past due in accordance with Pioneer's standard terms and conditions for like customers, a copy of which is attached as Appendix G to this Agreement. Shipments made in a calendar quarter prior to OxyChem's notification of Price pursuant to Section 5.2(a) shall be 7 13 invoiced at the price applicable to shipments during the prior calendar quarter. Within five (5) days after receipt of such notice from OxyChem, Pioneer shall send a statement to OxyChem reflecting any adjustments to invoices which are necessary to conform to the Price for the then current quarter. All amounts due as shown by such statement shall be reflected in Pioneer's invoices for next succeeding shipments hereunder. In the case of the invoice for the last month of this Agreement, the obligations of the Parties to make the adjustments required by the provisions of this paragraph shall survive the expiration or other termination of this Agreement and such adjustments, if any, to the invoice for the last month of this Agreement shall be paid by either Party, as the case may be, within twenty (20) days of the issuance of Pioneer's statement. SECTION 5.3 Pioneer's Right to Audit. Within sixty (60) days following any quarterly notification by OxyChem of the Price pursuant to the provisions of Section 5.2, or otherwise in connection with any question or dispute concerning (i) any quantities of chlorine or caustic soda to be supplied by Pioneer pursuant to the provisions of this Agreement, or (ii) any of the terms of any of the National Account Contracts, and, upon not less than fifteen (15) days notice in advance by Pioneer, OxyChem shall permit the Oxy Accountant to have access to and examine OxyChem's books and records sufficient to permit the verification of the weighted average price calculation in effect during such calendar quarter, the quantities of chlorine or caustic soda to be supplied by Pioneer pursuant to the provisions of this Agreement, or the applicable terms of any such National Account Contract, as the case may be. The Oxy Accountant shall report to Pioneer its conclusion concerning the accuracy of OxyChem's calculation of the foregoing items, and, if inaccurate, what the Oxy Accountant considers to be a correct adjustment. OxyChem shall instruct the Oxy Accountant not to disclose any additional information to Pioneer. The reasonable cost of such audit shall be borne by Pioneer, provided, however, that, if any such audit results in a finding that an adjustment of more than one percent (1%) to the Price of chlorine or caustic soda or to the quantities of chlorine or caustic soda to be so supplied by Pioneer is required to comply with the provisions of this Agreement, then the cost of such audit shall be borne by OxyChem. ARTICLE VI DELIVERY SECTION 6.1 Shipping Instructions. (a) Fifteen (15) days prior to the first day of each month (other than the initial month of the Term), OxyChem shall furnish to Pioneer, in writing, non-binding shipping instructions for each National Account which shall include an estimate of the quantities of chlorine and caustic soda required for (including a separate line item for any amounts subject to change under the relevant National Account Contract), and the delivery point and, pursuant to Section 6.3, the freight arrangements for shipments from the Tacoma Plant, or such other shipping point as the Parties may agree, to, each National Account during each of the next three months. Such instructions and estimates for the month immediately following such notice shall be considered final unless revised by OxyChem during the fifteen day period as well as during the delivery month 8 14 and resulting from changes in the requirements of a National Account permitted under the terms of the relevant National Account Contract and this Agreement, in which case such revised quantities shall be final. (b) The quantifies of chlorine and caustic soda required for, and the delivery points and, pursuant to Section 6.3, the freight arrangements for shipments to, each of the National Accounts for the initial month of the Term are specified in Appendix H to this Agreement. (c) In connection with shipments to each of the National Accounts, Pioneer shall comply with the delivery performance standards specified for such National Account in Appendix I to this Agreement. SECTION 6.2 Title and Risk of Loss. Title and risk of loss of chlorine and caustic soda delivered to the National Accounts shall pass from Pioneer to the relevant National Account as provided in the relevant National Account Contract. SECTION 6.3 Transportation Costs. For chlorine and caustic soda shipped by Pioneer from the Tacoma Plant, or any other shipping point as the Parties may agree, to the National Account delivery locations, in addition to the Price for such chlorine and caustic soda, OxyChem shall be responsible for the actual freight from the shipping point for such chlorine and caustic soda to the National Account delivery location and any agreed upon throughput cost incurred in shipping such caustic soda, if any. OxyChem may, at its sole option, and upon five (5) business days' prior notice, elect (a) to require Pioneer to ship chlorine or caustic soda on a freight prepaid and collect basis, or (b) to arrange directly with the provider of transportation services for the shipment of such chlorine or caustic soda. In the case of clause (a) above, the freight costs shall be added to Pioneer's invoice for chlorine and caustic soda and such invoice shall be paid by OxyChem as provided in Section 5.2. In the case of clause (b) above, OxyChem shall be responsible to pay the applicable transportation charges directly to the transportation service provider and Pioneer shall have no liability for such costs. Pioneer and OxyChem shall cooperate in exercising reasonable commercial efforts to reduce net transportation costs. SECTION 6.4 OxyChem's Right to Audit Certain Transportation Charges. Within sixty (60) days following the receipt of any invoice from Pioneer which includes transportation charges to be reimbursed by OxyChem pursuant to Section 6.3(a), and upon not less than fifteen (15) days' prior notice by OxyChem, Pioneer shall permit the Pioneer Accountant to have access to and examine Pioneer's books and records sufficient to permit the verification of the transportation charges reflected on such invoice. The Pioneer Accountant shall report to OxyChem its conclusion concerning the accuracy of Pioneer's invoice in respect of such transportation charges, and, if inaccurate, what the Accountant considers to be a correct adjustment. Pioneer shall instruct the Pioneer Accountant not to disclose any additional information to OxyChem. The reasonable cost of such audit shall be borne by OxyChem, provided, however, that, if any such audit results in a finding that an adjustment of more than one percent (1%) to the invoice in 9 15 respect of such transportation charges is required to comply with the provisions of Section 6.3, then the cost of such audit shall be borne by Pioneer. ARTICLE VII MEASUREMENT SECTION 7.1 Rail Car Delivery. (a) If chlorine and caustic soda is delivered in rail tank cars loaded at the Tacoma Plant, the quantity of chlorine and caustic soda shall be determined by rail tank car weigh scales or other mutually agreed measuring device which shall be operated, maintained and regularly calibrated by Pioneer in accordance with accepted industry practice. Pioneer's weights and measures shall govern except in case of demonstrated error. (b) If chlorine and caustic soda is delivered in rail tank cars loaded by a third party, the quantity of chlorine and caustic soda so delivered shall be determined by rail tank car weigh scales or other measuring device employed in connection with the loading of such rail cars in accordance with accepted industry practice. Third party weights and measures shall govern except in case of demonstrated error. SECTION 7.2 Calibration of Measuring Devices. (a) In respect of any chlorine and caustic soda delivered hereunder the quantity of which is measured by devices operated by Pioneer, Pioneer shall give OxyChem at least three (3) days' prior notice of any calibration test to be performed on any such device, and OxyChem may elect to have a representative present at any such test. If a level of inaccuracy is determined by such test at plus or minus one percent (1%) or more of full scale, Pioneer shall restore the measuring device to a condition of accuracy, and billings shall be corrected for any shipment(s) known to be affected by such inaccuracy. (b) In respect of any chlorine and caustic soda delivered hereunder the quantity of which is measured by devices operated by a third party, Pioneer shall exercise reasonable commercial efforts to afford to OxyChem (i) at least (3) days' prior notice of any calibration test (of which Pioneer has advance knowledge) to be performed on any such device, and (ii) an opportunity for OxyChem to have a representative present at any such test. If a level of inaccuracy is determined by such test at plus or minus one percent (1%) or more of full scale, Pioneer's billings to OxyChem shall be corrected for any shipment(s) known to be affected by such inaccuracy. 10 16 ARTICLE VIII WARRANTIES; LIMITATIONS OF CLAIMS SECTION 8.1 Pioneer's Warranty. PIONEER'S SOLE AND EXCLUSIVE WARRANTY IS THAT THE CHLORINE AND CAUSTIC SODA COMPLIES WITH THE PHYSICAL AND CHEMICAL SPECIFICATIONS SET FORTH IN APPENDIX A AND APPENDIX B TO THIS AGREEMENT. PIONEER MAKES NO OTHER WARRANTIES, EITHER EXPRESS OR IMPLIED, WHETHER WITH RESPECT TO ITS RECOMMENDATIONS, INSTRUCTIONS, PRODUCT APPARATUS, PROCESS OR OTHERWISE AND SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTIES, WHETHER OF MERCHANTABILITY, SUITABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE. SECTION 8.2 Patents. Pioneer's recommendations or instructions pursuant to this Agreement are not intended to suggest operations which would infringe any patents, and Pioneer assumes no liability to OxyChem of any kind or responsibility for any such infringement pursuant to this Agreement. SECTION 8.3 Packaging, Uses and Safe Handling. Pioneer shall properly package and label chlorine and caustic soda for shipment pursuant to applicable statutes, rules and regulations, SECTION 8.4 Emergency Response. During the Term of this Agreement, Pioneer shall maintain and implement emergency response procedures which are in accordance with the requirements of applicable statutes, rules and regulations governing the transportation and unloading of chlorine and caustic soda or, if more stringent, standards representing current prudent industry practice for the transportation and unloading of chlorine and caustic soda, in order to respond to (a) a release or threatened release of chlorine or caustic soda en route to the National Account delivery locations pursuant to this Agreement, and (b) a release or threatened release of chlorine or caustic soda occurring during the process of unloading chlorine or caustic soda at the National Account delivery locations pursuant to this Agreement (other than any delivery point owned or operated by OxyChem or its Affiliates) and which is attributable to any defect in the vehicle or vessel used to deliver such chlorine or caustic soda. SECTION 8.5 Quality Claims; Liability. OxyChem shall be deemed to have waived all claims with respect to the quality of any chlorine and caustic soda sold hereunder for which OxyChem's notice of insufficient quality has not been given to Pioneer in writing within forty-five (45) days of the receipt of such chlorine or caustic soda at the National Account delivery location. As to any claim of any nature with respect to the quality of chlorine or caustic soda sold under this Agreement, whether in contract, tort, strict liability or otherwise, the liability of Pioneer and its affiliates shall not exceed the Price of the portion of the chlorine and caustic soda in respect of which such claim is made plus any transportation charges thereon paid by OxyChem. 11 17 ARTICLE IX TAXES SECTION 9.1 Responsibility for Taxes. In addition to the Price and any transportation costs OxyChem is required to pay to Pioneer hereunder, OxyChem shall pay to Pioneer the amount of all governmental taxes, excises, duties, and/or other charges (including, without limitation, Superfund Assessments, and excepting (i) taxes (and any interest, additions to tax or penalties imposed in connection therewith) on or measured by Pioneer's net income, gross receipts, profits, net worth, shareholder's capital, net taxable capital, net taxable earned surplus, or asset value, and (ii) any taxes (and any interest, additions to tax or penalties imposed in connection therewith) imposed on or in respect of equipment used to produce or transport chlorine or caustic soda) that Pioneer may be required to pay with respect to the sale or transportation of the quantities of chlorine and caustic soda sold and delivered hereunder and which are standard in the industry and generally applicable to other purchasers of chlorine and caustic soda. Such charges shall be added to Pioneer's invoice as a separate line item and shall be paid by OxyChem pursuant to Section 5.2, provided that Pioneer furnishes to OxyChem satisfactory evidence of the amount and timely payment of any such charges. Pioneer and OxyChem will cooperate so as to minimize any sales and use taxes imposed by any state or local governmental authority including, without limitation, the prompt execution and delivery of any necessary exemption certificates required to reduce or claim complete exemption from any tax. ARTICLE X LIABILITY AND RESPONSIBILITY SECTION 10.1 Allocation of Liability. (a) Except to the extent caused by any breach of OxyChem's obligations hereunder, any act or omission of OxyChem, its agents or contractors, or any condition, event or action occurring after the time title and risk of loss passes pursuant to the provisions of Section 6.2 which is caused by any Person other than Pioneer, Pioneer assumes full responsibility for any liability arising out of or in connection with chlorine and caustic soda sold hereunder and compliance or non-compliance with any law or regulations relating thereto, including, without limitation, laws or regulations with respect to the protection of health, safety and the environment, including, but not limited to, liability attributable to any defect in the vehicle or vessel used to deliver such chlorine or caustic soda. With respect to matters for which Pioneer is liable under the preceding sentence, Pioneer shall defend, indemnify and hold harmless OxyChem, its Affiliates and their respective officers, directors, representatives and employees from and against all losses, liabilities, damages, costs and expenses ("Losses") made against or incurred by OxyChem, its Affiliates or their respective officers, directors, representatives and employees arising out of any claim, suit or proceeding ("Claim") by any governmental agency or any third party which alleges death, personal or economic injury, or damages to, or spills or releases on or into, any private or public property, resources or the environment, to the extent caused or contributed to by chlorine or caustic soda sold hereunder. 12 18 (b) Except to the extent caused by any breach of Pioneer's obligations hereunder, any act or omission of Pioneer, its agents or contractors, or any condition, event or action occurring prior to the time title and risk of loss passes pursuant to Section 6.2 which is caused by any Person other than OxyChem, OxyChem assumes full responsibility for any liability arising out of or in connection with chlorine and caustic soda sold hereunder and compliance or non-compliance with any law or regulations relating thereto, including, without limitation, laws or regulations with respect to the protection of health, safety and the environment, provided, however, that OxyChem shall have no responsibility for any liability in connection with the unloading of any chlorine or caustic soda sold hereunder which is attributable to any defect in the vehicle or vessel used to deliver such chlorine. With respect to matters for which OxyChem is liable under the preceding sentence, OxyChem shall defend, indemnify and hold harmless Pioneer, its Affiliates and their respective officers, directors, representatives and employees from and against all Losses made against or incurred by Pioneer, its Affiliates or their respective officers, directors, representatives and employees arising out of any Claim by any governmental agency or any third party which alleges death, personal or economic injury, or damages to, or spills or releases on or into, any private or public property, resources or the environment, to the extent caused or contributed to by chlorine or caustic soda sold hereunder. (c) Nether Party shall be liable for claims of the employees, contractors or agents of the other Party who are subject to workers' compensation laws. Notwithstanding anything to the contrary herein, neither Party shall be responsible for protection of the employees, agents or contractors of the other Party or liable for any failure to provide such protection, including, without limitation, compliance with occupational safety laws, except that Pioneer shall comply with safety rules in effect at the National Account delivery locations of which Pioneer has knowledge. SECTION 10.2 Procedures for Indemnification. (a) Promptly (and in any event within thirty (30) days) after a Party or Parties to be indemnified (whether one or more, the "Indemnified Party") receives notice of any Claim covered by Section 10.1, the Indemnified Party shall, if a Claim in respect thereof is to be made pursuant to Section 10.1, notify the Party from whom indemnification is sought (the "Indemnifying Party") of such Claim; provided, however, that the failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability which it may have to the Indemnified Party pursuant to Section 10.1, except to the extent of any material detriment suffered by the Indemnifying Party as a result of such failure. The amount of each Claim for indemnity, together with a list identifying each separate item of Loss to the extent known, shall be set forth in the Claim notice delivered to the Indemnifying Party. In the event that a Claim arises out of, or results from, Claims of third parties, the Indemnifying Party may at its option undertake the defense thereof by counsel or representatives chosen by it which are reasonably acceptable to the Indemnified Party. The Indemnifying Party shall have the sole right to compromise or settle any such Claim if (i) such settlement or disposition shall impose no material obligation or burden 13 19 whatsoever on the Indemnified Party which is not wholly discharged by the Indemnifying Party and shall provide a full release to the Indemnified Party, and (ii) the Indemnifying Party shall be fully capable of performing its obligations pursuant to such settlement or disposition. Each of the Indemnifying Party and the Indemnified Party shall be entitled to consult with each other, to the extent it reasonably requests, in respect of the defense of such Claim and shall cooperate in the defense of any such Claim, including making its officers, directors, employees and books and records (other than any National Account Contract) available for use in defending against such Claim, and it shall take such commercially reasonable actions within its power which are necessary to preserve any legal defenses to such matters. (b) If the Indemnifying Party, within a reasonable time after notice of any third party Claim, fails to undertake the defense of such Claim, the Indemnified Party will, by notice to the Indemnifying Party of its intent to do so, have the right to undertake the defense of such Claim with counsel or representatives chosen by it which are reasonably acceptable to the Indemnifying Party. The Losses of the Indemnified Party shall include the reasonable costs and expenses incurred in any such defense of a third party's Claim. Notwithstanding the foregoing, the Indemnified Party shall have no right to settle or to compromise any such Claim without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld. ARTICLE XI EXCUSE OF PERFORMANCE SECTION 11.1 Excuse of Performance. (a) Performance of any obligation under this Agreement may be suspended by either Party without liability, to the extent that: an Act of God; war; riot; fire; explosion; accident; flood; sabotage; mechanical breakdown; involuntary plant shutdown; governmental laws, regulations or orders; or any other cause (except financial) beyond the reasonable control of such Party, including, without limitation, any refusal or inability of any National Account to perform its obligations under any National Account Contract; or any labor trouble, strike, walkout, lockout or injunction (whether or not such labor event is within the reasonable control of such Party), delays, prevents, restricts, or limits the performance of, this Agreement or the consumption, sale or use of chlorine and caustic soda. The affected Party may invoke this provision by promptly notifying the other party in writing of the nature and estimated duration of the suspension period and shall exercise all reasonable diligence in curing such condition. (b) In the event that either Party exercises its right to suspend performance hereunder, the Term of this Agreement and the obligations of the Parties to purchase and sell chlorine and caustic soda hereunder allocable to such period that performance is suspended shall be extended, to the extent consistent with the National Account Contracts, one day for each day of such suspension provided that the suspension shall not exceed 30 days. In the event that such suspension is greater than 30 days but less than 180 days, this Agreement shall remain in effect with the obligations of the Parties to purchase and sell chlorine or caustic soda hereunder 14 20 suspended and the amount of chlorine and caustic soda which otherwise would have been delivered during the period of suspension deducted from the obligations contained herein to purchase and sell. If any suspension lasts more than 180 days, either Party may terminate this Agreement by providing the other Party written notice of its intent to terminate. ARTICLE XII DEFAULT AND REMEDIES SECTION 12.1 Default and Remedies. (a) In the event that: (i) OxyChem shall fail to pay any invoice in accordance with the terms of this Agreement, or (ii) any Party shall fail, in any material respect, in the due performance or observance by it of any of the terms, covenants or agreements contained in this Agreement, or (iii) any Party shall become or be adjudicated insolvent, bankrupt, or if a receiver or trustee shall be appointed for any Party or its property or a petition for reorganization or arrangement under any bankruptcy or insolvency law shall be approved, or an assignment shall be made for the benefit of creditors of any Party, or any Party shall file a voluntary petition of bankruptcy or shall consent to the appointment of a receiver or trustee, this Agreement shall, in the case of a default under clause (iii), immediately terminate, and in the case of a default under clause (i) or (ii), the non-defaulting Party shall have the right, at its sole discretion, to terminate this Agreement if the defaulting Party shall have failed to (A) cure the default within twenty (20) days of written notice of default, or (B) except in the case of a default under clause (i), diligently pursue the curing of the default, which termination remedy shall be in addition to all of its remedies at law or in equity, including, without limitation, those set forth in Section 12.1(c) to recover damages by reason of such default. In the event of any such termination, all sums owing or to become due and owing by any Party under this Agreement shall become and be immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Parties. (b) In the event that, with respect to any National Account Contract, Pioneer shall fail, in any material respect, in the due performance or observance by it of the performance standards specified in Section 6.1(c), in addition to the remedies provided for in clause (a) above, OxyChem may, upon notice to Pioneer and failure by Pioneer within thirty (30) days following such notice to correct any deficiency or if the matter is not such that it can be corrected in such period, to commence and diligently pursue thereafter steps necessary to correct any deficiency as promptly as possible, remove such National Account Contract from this Agreement, and, upon any such removal, such National Account Contract shall no longer be a National Account Contract subject to the provisions of this Agreement. (c) The Parties agree that the convenants and obligations contained in this Agreement relate to special, unique and extraordinary matters and that a violation of any of the terms hereof would cause irreparable injury in an amount which would be difficult or impossible to estimate or determine and for which any remedy at law would be inadequate. As such, the parties agree that, 15 21 if either Party fails or refuses to fulfill any of its obligations under this Agreement or to make any payment hereunder, then the other Party shall have the remedy of specific performance, which remedy shall be cumulative and nonexclusive and shall be in addition to any other rights and remedies otherwise available at law or in equity and to which such Party might be entitled. SECTION 12.2 Certain Damages Excluded. In no event shall either Party to this Agreement, or its Affiliates, have any liability to the other Party, or its Affiliates, for any (i) loss of business opportunities or for speculative or prospective profits, or (ii) special, indirect, consequential, incidental or punitive damages, provided, however, that in the event of any breach or failure by OxyChem to take and purchase the quantities of chlorine and caustic soda provided for hereunder, Pioneer shall be entitled to recover the difference, if any, between amounts realized from any sale in mitigation of damages resulting from such breach or failure in performance by OxyChem and the amount that would have been realized by Pioneer but for such breach or failure in performance by OxyChem, plus freight costs and throughput charges, if any, actually incurred by Pioneer and which otherwise would have been payable by OxyChem pursuant to the provisions of this Agreement. SECTION 12.3 Duty to Mitigate. Each Party shall take all such reasonable actions as may be necessary to mitigate damages for which such Party may claim damages or indemnification under this Agreement, provided, however, that in no event shall Pioneer be obligated to sell and deliver chlorine or caustic soda committed for but not taken and purchased by OxyChem to other than delivery points east of the Rocky Mountains. ARTICLE XIII MISCELLANEOUS SECTION 13.1 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns, but neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned, by operation of law or otherwise (other than as a result of any merger or consolidation), by any Party without the prior express written consent of the other Party; provided, however, that, notwithstanding the foregoing, (i), in connection with the sale of the Tacoma Plant as a whole, or any sale of the properties and assets of any Party substantially as an entirety, to any Person, the Party making such sale may assign this Agreement, or its rights hereunder, to such Person, (ii) any Party may assign this Agreement, or its rights hereunder, to any Affiliate of such Party, and (iii) Pioneer shall have the right to collaterally assign its rights under this Agreement to any bank, financial institution or other lender (or any such entity acting as an indenture trustee on behalf of any Person) that provides financing in connection with (x) the transactions contemplated by the Asset Purchase Agreement or any Related Agreement (including any renewal, extension or rearrangement of such financing) or (y) working capital financing for Facility Operations, provided, however, that no such collateral assignment shall release, discharge or otherwise excuse Pioneer from the performance of its obligations under this Agreement; provided, further, that (A), in the case of any assignment referred to in clause (i) or (ii) of this Section 13.1, prior to any such 16 22 assignment, the Person to which such assignment shall be made shall expressly assume, by an instrument in writing reasonably satisfactory to OxyChem or Pioneer, as the case may be, executed and delivered to OxyChem or Pioneer, as the case may be, the performance and observance of every obligation, covenant and agreement in this Agreement on the part of the Party making such assignment to be performed or observed, and (B) no such assignment shall have the effect of releasing such Party or any other Person (including any such additional Party) from its obligations, covenants or agreements under this Agreement. SECTION 13.2 Entire Agreement; Amendment. This Agreement constitutes the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior understandings and agreements with respect thereto. This Agreement may be amended, and any provision hereof waived, but only in writing signed by the Party against whom such amendment or waiver is sought to be enforced. No waiver by any Party of any default, misrepresentation or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any such occurrence. Neither the failure nor any delay by any Party in exercising any right, power or privilege under this Agreement will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege will preclude any further or other exercise of such right, power or privilege or the exercise of any other right, power or privilege. SECTION 13.3 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the Sate of Washington, without regard to principles of conflict of laws. The execution and delivery of this Agreement shall be deemed to be the transaction of business within the State of Washington for purposes of conferring jurisdiction upon courts located within the State of Washington. The Parties agree that any court proceedings arising out of this Agreement may be brought in the federal or state courts in the State of Washington, and both Parties consent to the jurisdiction of such courts. Each Party irrevocably waives (a) any objection which such Party may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of, or relating to, this Agreement brought in any such court, (b) any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum, and (c) the right to object, with respect to any such claim, suit, action or proceeding brought in any such court, that such court does not have jurisdiction over such Party. In addition, any such suit, action or proceeding may be brought in any court having jurisdiction pursuant to applicable law. SECTION 13.4 Notices. Any notice or communication required or permitted to be given pursuant to this Agreement shall be writing and sent by (i) personal delivery (including courier service), (ii) telecopier to the number indicated below, or (iii) first class or registered or certified mail, postage prepaid and addressed as follows (any such notice or communication being deemed given upon receipt). 17 23 If to OxyChem for matters concerning caustic soda: Occidental Chemical Corporation 5005 LBJ Freeway Dallas, Texas 75244 Attention: Vice President - Caustic Soda Telephone: 972-404-3820 Facsimile: 972-404- If to OxyChem for matters concerning chlorine: Occidental Chemical Corporation 5005 LBJ Freeway Dallas, Texas 75244 Attention: Vice President - Chlorine Telephone: 972-404-4195 Facsimile: 972-404-3406 If to Pioneer for matters concerning caustic soda or chlorine: Pioneer Chlor Alkali Company, Inc. 700 Louisiana Street, Suite 4200 Houston, Texas 77002 Attention: Vice President - Sales and Marketing Telephone: (713) 225-3831 Facsimile: (713) 225-4426 If to Pioneer for matters concerning other matters hereunder: Pioneer Companies, Inc. 700 Louisiana Street, Suite 4200 Houston, Texas 77002 Attention: Vice President and General Counsel Telephone: (713) 225-3831 Facsimile: (713) 225-9202 SECTION 13.5 Competition; Access to National Account Contracts. Nothing set forth in this Agreement shall prevent either Party or any of its Affiliates from competing with the other Party or any of its Affiliates in the sale of chlorine or caustic soda to any of the National Accounts or to any other Person. Except as specifically set forth in this Agreement, OxyChem shall under no circumstance be obligated to deliver to Pioneer or any of its Affiliates, or to disclose to Pioneer or any such Affiliate, any of the provisions of any of the National Account Contracts. 18 24 SECTION 13.6 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any jurisdiction. SECTION 13.7 Headings. The Table of Contents set forth in, and the descriptive headings of the several Articles and Sections of, this Agreement are inserted for convenience only and do not constitute a part of this Agreement. SECTION 13.8 Counterparts. This Agreement may be executed in one or more counterparts, each of which when so executed shall be deemed an original, but all of which together shall constitute one and the same instrument. SECTION 13.9 Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event that any ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Personal pronouns, when used in this Agreement, whether in the masculine, feminine or neutral gender, shall include all other genders, and the singular shall include the plural and vice versa. SECTION 13.10 Third Party Beneficiaries. NOTHING EXPRESSED OR IMPLIED IN THIS AGREEMENT IS INTENDED, OR SHALL BE CONSTRUED, TO CONFER UPON OR GIVE ANY PERSON OTHER THAN THE PARTIES HERETO AND THEIR SUCCESSORS AND PERMITTED ASSIGNEES, ANY RIGHTS, REMEDIES OR OBLIGATIONS UNDER, OR BY REASON OF, THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. SECTION 13.11 Payments. Any payments by, or on behalf of, the Parties pursuant to any provisions of this Agreement shall be made by wire transfer of immediately available funds to a bank account of the Party receiving such payment at the bank used by such Party and each Party hereto shall furnish to the other the name of its bank and the number of the account thereat to which payments shall be directed. SECTION 13.12 Incorporation of Appendices. The Appendices identified in this Agreement are incorporated herein by reference and made a part hereof. [balance of this page intentionally left blank] 19 25 IN WITNESS WHEREOF, the Parties have, by their duly authorized representatives, signed this Chlorine and Caustic Soda Sales Agreement as of the day and year first above written. PIONEER CHLOR ALKALI COMPANY, INC. By: /s/ PHILIP J. ABLOVE -------------------------------- Name: Philip J. Ablove Title: Vice President and Chief Financial Officer OCCIDENTAL CHEMICAL CORPORATION By: /s/ CHARLES L. MEARS -------------------------------- Name: Charles L. Mears Title: Executive Vice President 20 EX-10.14 6 CHLORINE PURCHASE AGREEMENT 1 EXHIBIT 10.14 ================================================================================ CHLORINE PURCHASE AGREEMENT between PIONEER CHLOR ALKALI COMPANY, INC. and OCC TACOMA, INC. Dated as of June 17, 1997 ================================================================================ 2 TABLE OF CONTENTS
Page Number ----------- Parties and Recitals ARTICLE I DEFINITIONS SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . 1 ARTICLE II COMMITMENTS OF PURCHASE AND SALE SECTION 2.1 Purchase Commitment . . . . . . . . . . . . . . . . . . . 3 SECTION 2.2 Sales Commitment . . . . . . . . . . . . . . . . . . . . 3 ARTICLE III QUANTITY SECTION 3.1 Pioneer's Annual Volume Options . . . . . . . . . . . . . 3 SECTION 3.2 OCC Tacoma's Annual Volume Options. . . . . . . . . . . . 4 SECTION 3.3 Notification of Annual Quantities . . . . . . . . . . . . 4 SECTION 3.4 Priority of Obligations Under this Agreement . . . . . . 5 ARTICLE IV TERM SECTION 4.1 Term of this Agreement . . . . . . . . . . . . . . . . . 6 ARTICLE V PRICE SECTION 5.1 Price of Chlorine . . . . . . . . . . . . . . . . . . . . 6 SECTION 5.2 Notification of the Price; OCC Tacoma's Payment . . . . . 6 SECTION 5.3 Pioneer's Right to Audit . . . . . . . . . . . . . . . . 7
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Page Number ----------- ARTICLE VI DELIVERY SECTION 6.1 Shipping Instructions . . . . . . . . . . . . . . . . . . 7 SECTION 6.2 Title and Risk of Loss . . . . . . . . . . . . . . . . . 8 SECTION 6.3 Transportation Costs . . . . . . . . . . . . . . . . . . 8 SECTION 6.4 OCC Tacoma's Right to Audit Certain Transportation Charges . . . . . . . . . . . . . . . . . 9 ARTICLE VII MEASUREMENT SECTION 7.1 Rail Car Delivery . . . . . . . . . . . . . . . . . . . . 9 SECTION 7.2 Calibration of Measuring Devices . . . . . . . . . . . . 10 ARTICLE VIII WARRANTIES; LIMITATIONS OF CLAIMS SECTION 8.1 Pioneer's Warranty . . . . . . . . . . . . . . . . . . . 10 SECTION 8.2 Patents . . . . . . . . . . . . . . . . . . . . . . . . . 10 SECTION 8.3 Packaging, Uses and Safe Handling . . . . . . . . . . . . 10 SECTION 8.4 Emergency Response . . . . . . . . . . . . . . . . . . . 11 SECTION 8.5 Quality Claims; Liability . . . . . . . . . . . . . . . . 11 ARTICLE IX TAXES SECTIONS 9.1 Responsibility for Taxes . . . . . . . . . . . . . . . . 11 ARTICLE X LIABILITY AND RESPONSIBILITY SECTION 10.1 Allocation of Liability . . . . . . . . . . . . . . . . . 12 SECTION 10.2 Procedures for Indemnification . . . . . . . . . . . . . 13 ARTICLE XI EXCUSE OF PERFORMANCE SECTION 11.1 Excuse of Performance . . . . . . . . . . . . . . . . . . 14
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Page Number ----------- ARTICLE XII DEFAULT AND REMEDIES SECTION 12.1 Default and Remedies . . . . . . . . . . . . . . . . . . 14 SECTION 12.2 Certain Damages Excluded . . . . . . . . . . . . . . . . 15 SECTION 12.3 Duty to Mitigate . . . . . . . . . . . . . . . . . . . . 15 ARTICLE XIII MISCELLANEOUS SECTION 13.1 Successors and Assigns . . . . . . . . . . . . . . . . . 16 SECTION 13.2 Entire Agreement; Amendment . . . . . . . . . . . . . . . 16 SECTION 13.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . 17 SECTION 13.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 17 SECTION 13.5 Severability . . . . . . . . . . . . . . . . . . . . . . 18 SECTION 13.6 Competition . . . . . . . . . . . . . . . . . . . . . . . 18 SECTION 13.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . 18 SECTION 13.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . 18 SECTION 13.9 Construction . . . . . . . . . . . . . . . . . . . . . . 18 SECTION 13.10 Third Party Beneficiaries . . . . . . . . . . . . . . . . 18 SECTION 13.11 Payments . . . . . . . . . . . . . . . . . . . . . . . . 18 SECTION 13.12 Incorporation of Appendices . . . . . . . . . . . . . . . 18
Appendix A Appendix B Appendix C iii 5 LIST OF APPENDICES
APPENDIX DESCRIPTION -------- ----------- Appendix A Chlorine Specifications Appendix B Initial Month Quantities and Shipping Details Appendix C Pioneer's Standard Terms and Conditions
iv 6 CHLORINE PURCHASE AGREEMENT THIS CHLORINE PURCHASE AGREEMENT, dated as of the 17th day of June, 1997, is between OCC TACOMA, INC., a Delaware corporation, and PIONEER CHLOR ALKALI COMPANY, INC., a Delaware corporation. WHEREAS, pursuant to the Asset Purchase Agreement (as such term and certain other terms used in this Agreement with the initial capital letters are defined or incorporated by reference in Article I), the Parties have provided for the sale by OCC Tacoma, and the purchase by Pioneer, of OCC Tacoma's chloralkali manufacturing facility located at Tacoma, Washington; and WHEREAS, after the sale of the Tacoma Plant to Pioneer, Pioneer desires to sell and deliver to OCC Tacoma, and OCC Tacoma desires to take and pay for, certain quantities of chlorine for a limited period of time; and WHEREAS, OCC Tacoma is a wholly-owned subsidiary of OxyChem; and WHEREAS, the Parties are entering into this Agreement in accordance with the provisions of the Asset Purchase Agreement; NOW, THEREFORE, in consideration of the premises and the mutual benefits and agreements hereinafter set forth, the Parties do hereby agree as follows: ARTICLE I DEFINITIONS SECTION 1.1 Definitions. As used in this Agreement, and unless the context requires a different meaning, the following terms have the meanings indicated below (such meanings to be equally applicable to both the singular and the plural forms of the terms defined). Capitalized terms not otherwise specifically defined herein shall have the meanings assigned to them in the Asset Purchase Agreement. "Affiliate" means any Person that is an "affiliate" within the meaning of the regulations promulgated under the Securities Act of 1933, as amended, as such regulations and Act shall be amended and in effect on the date of this Agreement. "Agreement" means this Chlorine Purchase Agreement, as the same may be amended pursuant to the provisions hereof. 1 7 "Asset Purchase Agreement" means the Asset Purchase Agreement, dated as of May 14, 1997, between OCC Tacoma and Pioneer. "chlorine" means liquid chlorine having the specifications set forth in Appendix A to this Agreement. All references to quantities of chlorine in this Agreement shall be in units of short tons. "Claim" has the meaning specified in Section 10.1. "Delivery Points" has the meaning specified in Section 6.1(a). "Indemnified Party" has the meaning specified in Section 10.2. "Indemnifying Party" has the meaning specified in Section 10.2. "Initial Year" means the twelve-month period of time beginning with the first day of the month in which this Agreement shall become effective. "Losses" has the meaning specified in Section 10.1. "month" means a calendar month. "OCC Tacoma" means OCC Tacoma, Inc., a Delaware corporation. "Oxy Accountant" means Arthur Andersen LLP or such other nationally recognized accounting firm as shall be selected by OxyChem. "OxyChem" means Occidental Chemical Corporation, a New York corporation. "Party" means Pioneer or OCC Tacoma, as applicable, and "Parties" means Pioneer and OCC Tacoma. "Person" means any natural person, corporation, limited liability company, partnership, group, joint venture, trust, association or other business enterprise or organization or any government or agency or political subdivision thereof or any other entity. "Pioneer" means Pioneer Chlor Alkali Company, Inc., a Delaware corporation. "Pioneer Accountant" means Deloitte & Touche LLP or such other nationally recognized accounting firm as shall be selected by Pioneer. 2 8 "Price" means the price of chlorine determined in accordance with the provisions of Article V. "short ton" means two thousand (2000) pounds. "Superfund Assessment" means the assessment on the production and sale of chlorine imposed pursuant to the Comprehensive Environmental Response, Compensation and Liability Act, as the same may be from time to time amended or reauthorized and in effect. "Tacoma Plant" means the chloralkali manufacturing facility acquired by Pioneer pursuant to the Asset Purchase Agreement and located at 605 Alexander Avenue, Tacoma, Washington. "Term" has the meaning specified in Section 4.1. "VCM" means vinyl chloride monomer. "year" or "yearly" means the Initial Year and, thereafter, any consecutive twelve-month period beginning on the first day of the month in which this Agreement shall become effective. ARTICLE II COMMITMENTS OF PURCHASE AND SALE SECTION 2.1 Purchase Commitment. Upon the terms and subject to the conditions set forth in this Agreement, each year during the Term, OCC Tacoma agrees to take and purchase from Pioneer the quantity of chlorine hereinafter described and at the Price hereinafter set forth. SECTION 2.2 Sales Commitment. Upon the terms and subject to the conditions set forth in this Agreement, each year during the Term, Pioneer agrees to deliver and sell to OCC Tacoma the quantity of chlorine hereinafter described and at the Price hereinafter set forth. ARTICLE III QUANTITY SECTION 3.1 Pioneer's Annual Volume Options. Subject to the requirements of Section 3.3(a), during each year of the Term of this Agreement, Pioneer may require OCC Tacoma to take and purchase from Pioneer all or any portion of the quantity of chlorine specified below as applicable for that year. 3 9
- ------------------------------------------------------------------------------------------- YEAR INITIAL 2 3 4 5 - ------------------------------------------------------------------------------------------- Volumes 100,000 100,000 75,000 50,000 25,000 (short tons)
SECTION 3.2 OCC Tacoma's Annual Volume Options. Subject to the requirements of Section 3.3(b), during each year of the Term of this Agreement, OCC Tacoma may require Pioneer to deliver and sell to OCC Tacoma all or any portion of the quantity of chlorine specified below as applicable for that year.
- ------------------------------------------------------------------------------------------- YEAR INITIAL 2 3 4 5 - ------------------------------------------------------------------------------------------- Volumes 100,000 100,000 75,000 0 0 (short tons)
SECTION 3.3 Notification of Annual Quantities. (a) Not less than one hundred twenty (120) days prior to the end of the Initial Year and year 2, Pioneer shall submit to OCC Tacoma, in writing, a binding notification of the quantity of chlorine which Pioneer elects to require OCC Tacoma to take and purchase from Pioneer, pursuant to Section 3.1, during the following year. The quantity specified in such notice shall not exceed the maximum quantity which Pioneer may elect to require OCC Tacoma to take and purchase from Pioneer for such year as specified in Section 3.1. The quantity which OCC Tacoma shall take and purchase from Pioneer in the Initial Year shall be 100,000 short tons. With respect to the quantity of chlorine which Pioneer elects to require OCC Tacoma to take and purchase from Pioneer, pursuant to Section 3.1, during year 4 and year 5, Pioneer shall submit the notices described below: (i) Not later than September 30, 1999, Pioneer shall provide the notice described in Section 3.3(a) with respect to the quantity of chlorine which Pioneer elects to require OCC Tacoma to take and purchase from Pioneer, pursuant to Section 3.1, during the period beginning on the first day of year 4 and ending on December 31 thereafter. The quantity of chlorine specified in such notice shall not exceed an amount determined by multiplying 50,000 by a fraction, the numerator of which is the number of days from the beginning of year 4 to December 31 thereafter and the denominator of which is 365. (ii) Not later than September 30, 2000, Pioneer shall provide the notice described in Section 3.3(a) with respect to the quantity of chlorine which Pioneer elects to require OCC Tacoma to take and purchase from Pioneer, pursuant to Section 3.1, during the period (A) beginning on January 1, 2001 and ending on the last day of year 4, and (B) beginning on the first day of year 5 and ending on December 31 thereafter. The quantities of chlorine specified in such 4 10 notice shall not exceed, in the case of (A) above, an amount determined by multiplying 50,000 by a fraction, the numerator of which is the number of days from January 1, 2001 to the last day of year 4 and the denominator of which is 365. The quantities of chlorine specified in such notice shall not exceed, in the case of (B) above, an amount determined by multiplying 25,000 by a fraction, the numerator of which is the number of days from the first day of year 5 to December 31 thereafter and the denominator of which is 365. (iii) Not later than September 30, 2001, Pioneer shall provide the notice described in Section 3.3(a) with respect to the quantity of chlorine which Pioneer elects to require OCC Tacoma to take and purchase from Pioneer, pursuant to Section 3.1, during the period beginning on January 1, 2002 and ending on the last day of year 5. The quantity of chlorine specified in such notice shall not exceed an amount determined by multiplying 25,000 by a fraction, the numerator of which is the number of days from January 1, 2002 to the last day of year 5 and the denominator of which is 365. (b) Not less than one hundred twenty (120) days prior to the end of the Initial Year and year 2, OCC Tacoma shall submit to Pioneer, in writing, a binding notification of the quantity of chlorine which OCC Tacoma elects to require Pioneer to deliver and sell to OCC Tacoma, pursuant to Section 3.2, during the following year. The quantity specified in such notice shall not exceed the maximum quantity which OCC Tacoma may elect to require Pioneer to deliver and sell to OCC Tacoma for such year as specified in Section 3.2. The quantity which Pioneer shall deliver and sell to OCC Tacoma in the Initial Year shall be 100,000 short tons. (c) The quantities of chlorine nominated by each Party pursuant to the provisions of Sections 3.3(a) and 3.3(b) for each of the two years which succeed the Initial Year shall not be aggregated for purposes of determining the total quantity of chlorine to be purchased and sold by the Parties during any year. For any year (other than the Initial Year), the higher of such quantity nominations shall constitute the total volume of chlorine to be purchased and sold by the Parties for such year pursuant to this Agreement. SECTION 3.4 Priority of Obligations Under this Agreement. The obligations of the Parties to sell and purchase chlorine pursuant to this Agreement shall have priority over the Parties' obligations to sell and purchase chlorine to or from any other Person, whether pursuant to a written agreement or otherwise (including, without limitation, the Parties' internal requirements). Subject to Section 11.1, the Parties' rights and obligations to purchase and sell chlorine pursuant to the provisions of this Agreement shall not be subject to allocation among other customers, suppliers or the Parties' internal requirements. 5 11 ARTICLE IV TERM SECTION 4.1 Term of this Agreement. The term (the "Term") of this Agreement shall commence, and this Agreement shall become effective, on the date of the Closing and shall terminate on the last day of the month prior to the fifth anniversary of the Closing. ARTICLE V PRICE SECTION 5.1 Price of Chlorine. Each calendar quarter during the Term, the price (the "Price") of chlorine sold by Pioneer to OCC Tacoma hereunder, expressed in dollars per short ton, shall be an amount equal to the weighted average price (net of freight charges actually incurred and paid) per short ton for all chlorine sold by OxyChem to non-Affiliate U.S. Gulf Coast contract customers for the manufacture of VCM during the immediately preceding calendar quarter. The Price of chlorine sold hereunder shall be determined as of the date of shipment. SECTION 5.2 Notification of the Price; Payment. (a) Not later than the twentieth (20th) day of the first month of each calendar quarter during the Term (other than the initial calendar quarter), OCC Tacoma shall provide to Pioneer a written notification of the Price applicable to chlorine during the preceding calendar quarter and which shall be the Price applicable to chlorine sold to OCC Tacoma during the then current calendar quarter pursuant to this Agreement. At all times during the Term, Pioneer shall take such measures, and implement and utilize such procedures, as will ensure that access to the Price applicable to chlorine sold to OCC Tacoma pursuant to this Agreement (i) will be limited to employees of Pioneer who have a need to know such information for the purpose of discharging Pioneer's financial and accounting obligations, and (ii) will not be provided to (A) any personnel of Pioneer or any of its Affiliates who exercise any pricing, sales or marketing responsibilities for, or on behalf of, Pioneer or any such Affiliate, or (B) any director, officer or employee of Pioneer or any such Affiliates who does not have a need to know such Price for the purpose of discharging Pioneer's financial and accounting obligations. (b) The foregoing obligations of confidence, nondisclosure and non-use shall not apply to any information that (i) was in the public domain at the time of disclosure by OxyChem or any of its Affiliates to Pioneer; (ii) enters the public domain through no fault of Pioneer; (iii) was communicated to Pioneer by any other Person free of any obligation of confidence; or (iv) was developed by officers, employees or agents of or consultants to Pioneer independently of and without reference to the proprietary information of OxyChem. The Price of chlorine sold hereunder, shall not be deemed to be within the public domain, or communicated free of any obligation of confidence, for purposes of the provisions of this paragraph simply because it is known by the U.S. Gulf Coast contract customers of OCC Tacoma or OxyChem. 6 12 (c) The Price of chlorine which shall be in effect for the initial calendar quarter, or portion thereof if this Agreement is not effective as of the first day of the initial calendar quarter, shall be determined as provided in Section 5.1 above, using the Price applicable to chlorine during the calendar quarter immediately preceding the calendar quarter in which this Agreement shall become effective. (d) Pioneer shall invoice OCC Tacoma on the date of shipment for each shipment of chlorine delivered during the preceding month at the Price specified by OCC Tacoma as applicable during such period pursuant to this Article V. Payment terms for Pioneer's invoice shall be net thirty (30) days from the date of the invoice with OCC Tacoma to pay interest (not to exceed the maximum lawful rate) on any amounts past due in accordance with Pioneer's standard terms and conditions for like customers, a copy of which is attached as Appendix C to this Agreement. Shipments made in a calendar quarter prior to OCC Tacoma's notification of Price pursuant to Section 5.2(a) shall be invoiced at the Price applicable to shipments during the prior calendar quarter. Within five (5) days after receipt of such notice from OCC Tacoma, Pioneer shall send a statement to OCC Tacoma reflecting any adjustments to invoices which are necessary to conform to the Price for the then current quarter. All amounts due as shown by such statement shall be reflected in Pioneer's invoices for next succeeding shipments hereunder. SECTION 5.3 Pioneer's Right to Audit. Within sixty (60) days following any quarterly notification by OCC Tacoma of the Price pursuant to the provisions of Section 5.2, and upon not less than fifteen (15) days' notice in advance by Pioneer, OCC Tacoma shall permit, and shall cause OxyChem to permit, the Oxy Accountant to have access to and examine OCC Tacoma's and OxyChem's books and records sufficient to permit the verification of the calculation of the Price of chlorine in effect during such calendar quarter. The Oxy Accountant shall report to Pioneer its conclusion concerning the accuracy of OCC Tacoma's calculations of the foregoing items, and, if inaccurate, what the Oxy Accountant considers to be a correct adjustment. OxyChem shall instruct the Oxy Accountant not to disclose any additional information to Pioneer. The reasonable cost of such audit shall be borne by Pioneer, provided, however, that, if any such audit results in a finding that an adjustment of more than one percent (1%) to the Price of chlorine is required to comply with the provisions of Section 5.1, then the cost of such audit shall be borne by OCC Tacoma. ARTICLE VI DELIVERY SECTION 6.1 Shipping Instructions. (a) Subject to the provisions of Section 11.1(a), all shipments of chlorine hereunder shall be delivered by Pioneer from the Tacoma Plant, or such other shipping point as the Parties may agree, to OxyChem's facility in Ingleside, Texas, or such other locations as shall be mutually agreed by the Parties (collectively, the "Delivery Points"). 7 13 (b) Fifteen (15) days prior to the first day of each month (other than the initial month of the Term), OCC Tacoma shall furnish to Pioneer, in writing, non-binding shipping instructions which shall include an estimate of the quantities of chlorine to be shipped, and the Delivery Point for each shipment, and, pursuant to Section 6.3, the freight arrangements for shipments, during each of the next three months. Such instructions and estimates for the month immediately following such notice shall be final. (c) The quantities of chlorine to be shipped, and the Delivery Points and, pursuant to Section 6.3, the freight arrangements for shipments during the initial month of the Term are specified in Appendix B to this Agreement. (d) Unless otherwise specifically agreed by the Parties, Pioneer shall not be required to deliver, nor shall OCC Tacoma be required to receive, during any month, more than one-tenth of the total quantity of chlorine to be purchased and sold by the Parties during the then current year. SECTION 6.2 Title and Risk of Loss. Title and risk of loss of any chlorine delivered hereunder shall pass to OCC Tacoma upon actual placement by the railroad at the Delivery Point of the tank car containing such chlorine. SECTION 6.3 Transportation Costs. (a) For each shipment of chlorine pursuant to this Agreement during the Initial Year and the two consecutive years after the Initial Year, in addition to the Price for such chlorine, OCC Tacoma shall be responsible for the actual freight cost incurred in shipping such chlorine from the Tacoma Plant, or such other shipping point as the Parties may agree, to the designated Delivery Points. OCC Tacoma may, at its sole option, and upon five business days' prior notice, elect (i) to require Pioneer to ship chlorine on a freight prepaid and collect basis, or (ii) to arrange directly with a provider of transportation services for the shipment of such chlorine. In the case of clause (i) above, the freight costs shall be added to Pioneer's invoice for chlorine and such invoice shall be paid by OCC Tacoma as provided in Section 5.2. In the case of clause (ii) above, OCC Tacoma shall be responsible to pay the applicable transportation charges directly to the transportation service provider and Pioneer shall have no liability for such costs. (b) For each shipment of chlorine pursuant to this Agreement during the fourth and fifth years of the Term, in addition to the Price for such chlorine, OCC Tacoma shall be responsible for fifty percent (50%) of the actual freight cost incurred in shipping such chlorine from the Tacoma Plant, or such other shipping point as the Parties may agree, to the designated Delivery Points and Pioneer shall be responsible for the remaining fifty percent (50%) of such freight cost. OCC Tacoma may, at its sole option, and upon five business days' prior notice, elect (i) to require Pioneer to ship chlorine on a freight prepaid and collect basis, or (ii) to arrange directly with a provider of transportation services for the shipment of such chlorine. In the case of clause (i) above, fifty percent (50%) of the freight costs shall be added to Pioneer's invoice for chlorine and such invoice shall be paid by OCC Tacoma as provided in Section 5.2. In the case of 8 14 clause (ii) above, OCC Tacoma shall be responsible to pay the applicable transportation charges directly to the transportation service provider and shall receive a credit of fifty percent (50%) of such transportation charges against Pioneer's invoice with respect to such chlorine. (c) OCC Tacoma shall pay any applicable rail car demurrage charges in accordance with Pioneer's standard terms and conditions, attached as Appendix C to this Agreement. (d) Pioneer and OCC Tacoma shall cooperate in exercising reasonable commercial efforts to reduce net transportation costs on shipments of chlorine pursuant to this Agreement. (e) Regardless of the manner in which freight costs are allocated in this Agreement, all chlorine sold by Pioneer pursuant to this Agreement shall be delivered in rail cars owned or leased by Pioneer. OCC Tacoma shall have no responsibility to provide or otherwise to make rail cars available to Pioneer for the shipment of chlorine pursuant to this Agreement, nor, except as otherwise provided in this Agreement, for any cost or expense in connection therewith. SECTION 6.4 OCC Tacoma's Right to Audit Certain Transportation Charges. Within sixty (60) days following the receipt of any invoice from Pioneer which includes transportation charges to be reimbursed by OCC Tacoma pursuant to Section 6.3(a)(i) or Section 6.3(b)(i), and upon not less than fifteen (15) days' prior notice by OxyChem, Pioneer shall permit the Pioneer Accountant to have access to and examine Pioneer's books and records sufficient to permit the verification of the transportation charges reflected on such invoice. The Pioneer Accountant shall report to OCC Tacoma its conclusion concerning the accuracy of Pioneer's invoice in respect of such transportation charges, and, if inaccurate, what the Pioneer Accountant considers to be a correct adjustment. Pioneer shall instruct the Pioneer Accountant not to disclose any additional information to OCC Tacoma. The reasonable cost of such audit shall be borne by OCC Tacoma, provided, however, that if any such audit results in a finding that an adjustment of more than one percent (1%) to the invoice in respect of such transportation charges is required to comply with the provisions of Section 6.3, then the cost of such audit shall be borne by Pioneer. ARTICLE VII MEASUREMENT SECTION 7.1 Rail Car Delivery. (a) If chlorine is delivered in rail tank cars loaded at the Tacoma Plant, the quantity of chlorine shall be determined by rail tank car weigh scales or other mutually agreed measuring device which shall be operated, maintained and regularly calibrated by Pioneer in accordance with accepted industry practice. Pioneer's weights and measures shall govern except in case of demonstrated error. (b) If chlorine is delivered in rail tank cars loaded by a third party, the quantity of chlorine so delivered shall be determined by rail tank car weigh scales or other measuring device 9 15 employed in connection with the loading of such rail cars in accordance with accepted industry practice. Third party weights and measures shall govern except in case of demonstrated error. SECTION 7.2 Calibration of Measuring Devices. (a) In respect of any chlorine delivered hereunder the quantity of which is measured by devices operated by Pioneer, Pioneer shall give OCC Tacoma at least three (3) days' prior notice of any calibration test to be performed on any such device, and OCC Tacoma may elect to have a representative present at any such test. If a level of inaccuracy is determined by such test at plus or minus one percent (1%) or more of full scale, Pioneer shall restore the measuring device to a condition of accuracy, and billings shall be corrected for any shipment(s) known to be affected by such inaccuracy. (b) In respect of any chlorine delivered hereunder the quantity of which is measured by devices operated by a third party, Pioneer shall exercise reasonable commercial efforts to afford to OCC Tacoma (i) at least (3) days' prior notice of any calibration test (of which Pioneer has advance knowledge) to be performed on any such device, and (ii) an opportunity for OCC Tacoma to have a representative present at any such test. If a level of inaccuracy is determined by such test at plus or minus one percent (1%) or more of full scale, Pioneer's billings to OCC Tacoma shall be corrected for any shipment(s) known to be affected by such inaccuracy. ARTICLE VIII WARRANTIES; LIMITATIONS OF CLAIMS SECTION 8.1 Pioneer's Warranty. PIONEER'S SOLE AND EXCLUSIVE WARRANTY IS THAT THE CHLORINE COMPLIES WITH THE PHYSICAL AND CHEMICAL SPECIFICATIONS SET FORTH IN APPENDIX A TO THIS AGREEMENT. PIONEER MAKES NO OTHER WARRANTIES, EITHER EXPRESS OR IMPLIED, WHETHER WITH RESPECT TO ITS RECOMMENDATIONS, INSTRUCTIONS, PRODUCT APPARATUS, PROCESS OR OTHERWISE AND SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTIES, WHETHER OF MERCHANTABILITY, SUITABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE. SECTION 8.2 Patents. Pioneer's recommendations or instructions pursuant to this Agreement are not intended to suggest operations which would infringe any patents, and Pioneer assumes no liability to OCC Tacoma of any kind or responsibility for any such infringement pursuant to this Agreement. SECTION 8.3 Packaging, Uses and Safe Handling. Pioneer shall properly package and label chlorine for shipment pursuant to applicable statutes, rules and regulations. SECTION 8.4 Emergency Response. During the Term of this Agreement, Pioneer shall maintain and implement emergency response procedures which are in accordance with the requirements of applicable statutes, rules and regulations governing the transportation and 10 16 unloading of chlorine or, if more stringent, standards representing current industry practice for the transportation and unloading of chlorine, in order to respond to (a) a release or threatened release of chlorine en route to the Delivery Points pursuant to this Agreement, and (b) a release or threatened release of chlorine occurring during the process of unloading chlorine at the Delivery Points pursuant to this Agreement (other than any Delivery Point owned or operated by OxyChem or its Affiliates) and which is attributable to any defect in the vehicle or vessel used to deliver such chlorine. SECTION 8.5 Quality Claims; Liability. OCC Tacoma shall be deemed to have waived all claims with respect to any chlorine sold hereunder for which OCC Tacoma's notice of insufficient quality has not been given to Pioneer in writing within forty-five (45) days of the receipt of such chlorine. As to any claim of any nature with respect to the quality of chlorine sold under this Agreement, whether in contract, tort, strict liability or otherwise, the liability of Pioneer and its Affiliates shall not exceed the Price of the portion of the chlorine in respect of which such claim is made plus any freight costs or other transportation charges thereon paid by OCC Tacoma. Each such claim shall also be subject to the limitations of Section 12.2. ARTICLE IX TAXES SECTION 9.1 Responsibility for Taxes. In addition to the Price and any transportation charges OCC Tacoma is required to pay to Pioneer hereunder, OCC Tacoma shall pay to Pioneer the amount of all governmental taxes, excises, duties, and/or other charges (including, without limitation, Superfund Assessments, and excepting (i) taxes (and any interest, additions to tax or penalties imposed in connection therewith) on or measured by Pioneer's net income, gross receipts, profits, net worth, shareholder capital, net taxable capital, net taxable earned surplus, or asset value, and (ii) any taxes (and any interest, additions to tax or penalties imposed in connection therewith) imposed on or in respect of equipment used to produce or transport chlorine) that Pioneer may be required to pay with respect to the sale or transportation of the quantities of chlorine sold and delivered hereunder and which are standard in the industry and generally applicable to other purchasers of chlorine. Such charges shall be added to Pioneer's invoice as a separate line item and shall be paid by OCC Tacoma pursuant to Section 5.2, provided, that Pioneer furnishes to OCC Tacoma satisfactory written evidence of the amount and timely payment of such charges. Pioneer and OCC Tacoma will cooperate so as to minimize any sales and use taxes imposed by any state or local governmental authority including, without limitation, the prompt execution and delivery of any necessary exemption certificates required to reduce or claim complete exemption from any tax. 11 17 ARTICLE X LIABILITY AND RESPONSIBILITY SECTION 10.1 Allocation of Liability. (a) Except to the extent caused by any breach of OCC Tacoma's obligations hereunder, any act or omission of OCC Tacoma, its agents or contractors, or any condition, event or action occurring after the time the tank car is constructively or actually placed at the Delivery Point ("Delivery Time") which is caused by any Person other than Pioneer, Pioneer assumes full responsibility for any liability arising out of the manufacture, handling, storage, loading, transportation and, to the extent attributable to any defect in the vehicle or vessel used to deliver chlorine, the unloading of any chlorine sold hereunder and compliance or non-compliance with any law or regulations relating thereto, including, without limitation, laws or regulations with respect to the protection of health, safety and the environment. With respect to matters for which Pioneer is liable under the preceding sentence, Pioneer shall defend, indemnify and hold harmless OCC Tacoma, its Affiliates, and their respective officers, directors, representatives and employees from and against all losses, liabilities, damages and expenses ("Losses") made against or incurred by OCC Tacoma, its Affiliates, or their respective officers, directors, representatives and employees arising out of any claim, suit or proceeding ("Claim") by any governmental agency or any third party which alleges death, personal or economic injury, or damages to, or spills or releases on or into, any private or public property, resources or the environment, to the extent caused or contributed to by chlorine sold hereunder. (b) Except to the extent caused by any breach of Pioneer's obligations hereunder, any act or omission of Pioneer, its agents or contractors, or any condition, event or action occurring prior to the Delivery Time which is caused by any Person other than OCC Tacoma, OCC Tacoma assumes full responsibility for any liability arising out of the handling, storage and unloading of any chlorine sold hereunder and compliance or non-compliance with any law or regulations relating thereto, including, without limitation, laws or regulations with respect to the protection of health, safety and the environment, provided, however, that OCC Tacoma shall have no responsibility for any liability arising out of the unloading of any chlorine sold hereunder which is attributable to any defect in the vehicle or vessel used to deliver such chlorine. With respect to matters for which OCC Tacoma is liable under the preceding sentence, OCC Tacoma shall defend, indemnify and hold harmless Pioneer, its Affiliates, and their respective officers, directors, representatives and employees from and against all Losses made against or incurred by Pioneer, its Affiliates, or their respective officers, directors, representatives and employees arising out of any Claim by any governmental agency or any third party which alleges death, personal or economic injury, or damages to, or spills or releases on or into, any private or public property, resources or the environment, to the extent caused or contributed to by chlorine sold hereunder. (c) Neither Party shall be liable for claims of the employees, contractors or agents of the other Party who are subject to workers' compensation laws. Notwithstanding anything to the contrary herein, neither Party shall be responsible for protection of the employees, agents or 12 18 contractors of the other Party or liable for any failure to provide such protection, including, without limitation, compliance with occupational safety laws. SECTION 10.2 Procedures for Indemnification. (a) Promptly (and in any event within thirty (30) days) after a Party or Parties to be indemnified (whether one or more, the "Indemnified Party") receives notice of any Claim covered by Section 10.1, the Indemnified Party shall, if a Claim in respect thereof is to be made pursuant to Section 10.1, notify the Party from whom indemnification is sought (the "Indemnifying Party") in writing of such Claim; provided, however, that the failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability which it may have to the Indemnified Party pursuant to Section 10.1, except to the extent of any material detriment suffered by the Indemnifying Party as a result of such failure. The amount of each Claim for indemnity, together with a list identifying each separate item of Loss to the extent known, shall be set forth in the Claim notice delivered to the Indemnifying Party. In the event that a Claim arises out of, or results from, Claims of third parties, the Indemnifying Party may at its option undertake the defense thereof by counsel or representatives chosen by it which are reasonably acceptable to the Indemnified party. The Indemnifying Party shall have the sole right to compromise or settle any such Claim if (i) such settlement or disposition shall impose no material obligation or burden whatsoever on the Indemnified Party which is not wholly discharged by the Indemnifying Party and shall provide a full release to the Indemnified Party, and (ii) the Indemnifying Party shall be fully capable of performing its obligations pursuant to such settlement or disposition. Each of the Indemnifying Party and the Indemnified Party shall be entitled to consult with each other, to the extent it reasonably requests, in respect of the defense of such Claim and shall cooperate in the defense of any such Claim, including making its officers, directors, employees and books and records available for use in defending against such Claim, and it shall take those commercially reasonable actions within it power which are necessary to preserve any legal defenses to such matters. (b) If the Indemnifying Party, within a reasonable time after notice of any third party Claim, fails to undertake the defense of such Claim, the Indemnified Party will, by notice to the Indemnifying Party of its intent to do so, have the right to undertake the defense of such Claim with counsel or representatives chosen by it which are reasonably acceptable to the Indemnifying Party. The Losses of the Indemnified Party shall include the reasonable costs and expenses incurred in any such defense of a third party's Claim. Notwithstanding the foregoing, the Indemnified Party shall have no right to settle or compromise any such Claim without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld. 13 19 ARTICLE XI EXCUSE OF PERFORMANCE SECTION 11.1 Excuse of Performance. (a) Performance of any obligation under this Agreement may be suspended by either Party without liability, to the extent that: an Act of God; war; riot; fire; explosion; accident; flood; sabotage; mechanical breakdown; involuntary plant shutdown; governmental laws, regulations or orders; or any other cause (except financial) beyond the reasonable control of such Party; or any labor trouble, strike, walkout, lockout or injunction (whether or not such labor event is within the reasonable control of such Party), delays, prevents, restricts, or limits the performance of, this Agreement or the consumption, sale or use of chlorine, provided however, that if any of the foregoing events shall delay, prevent, restrict or limit OCC Tacoma's ability to receive chlorine at Ingleside, Texas, then for the first thirty days of any such period of suspension, OCC Tacoma shall not be relieved of its obligations under this Agreement to the extent that no such event delays, prevents, restricts or limits the ability of OCC Tacoma or any of its Affiliates to receive chlorine at any other State of Texas or Gulf Coast delivery point. The affected Party may invoke this provision by promptly notifying the other Party in writing of the nature and estimated duration of the suspension period and shall exercise all reasonable diligence in curing such condition. (b) In the event that either Party exercises its right to suspend performance hereunder, the Term of this Agreement and the obligations of the Parties to purchase and sell chlorine hereunder allocable to such period that performance is suspended shall be extended one day for each day of such suspension provided that the suspension shall not exceed 30 days. In the event that such suspension is great than 30 days but less than 180 days, this Agreement shall remain in effect with the obligations of the Parties to purchase and sell chlorine hereunder suspended and an amount of chlorine determined by multiplying the annual volume of chlorine to be delivered and received in the year in which the suspension of performance occurs (as fixed pursuant to Section 3.3) by a fraction, the numerator of which is the number of days in which performance is suspended (less thirty days in the case of OCC Tacoma) and the denominator of which is 365, deducted from the obligations contained herein to purchase and sell. If any such suspension lasts more than 180 days, the Party as to whom performance of its obligations under this Agreement has not been suspended may terminate this Agreement by providing the other Party written notice of its intent to terminate. ARTICLE XII DEFAULT AND REMEDIES SECTION 12.1 Default and Remedies. (a) In the event that: (i) OCC Tacoma shall fail to pay any invoice in accordance with the terms of this Agreement, (ii) any Party shall fail, in any material respect, in the due 14 20 performance or observance by it of any of the terms, covenants or agreements contained in this Agreement, or (iii) any Party shall become or be adjudicated insolvent, bankrupt, or if a receiver or trustee shall be appointed for any Party or its property or a petition for reorganization or arrangement under any bankruptcy or insolvency law shall be approved, or an assignment shall be made for the benefit of creditors of any Party, or any Party shall file a voluntary petition in bankruptcy or shall consent to the appointment of a receiver or trustee, this Agreement shall, in the case of a default under clause (iii), immediately terminate, and in the case of a default under clause (i) or (ii), the non-defaulting Party shall have the right, at its sole discretion, to terminate this Agreement if the defaulting Party shall have failed to (A) cure the default within twenty (20) days of written notice of default, or (B) except in the case of a default under clause (i), diligently pursue the curing of the default, which termination remedy shall be in addition to all of its remedies at law or in equity, including, without limitation, those set forth in Section 12.1(b), to recover damages by reason of such default. In the event of any such termination, all sums then owing by any Party under this Agreement shall become and be immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Parties. (b) The Parties agree that the covenants and obligations contained in this Agreement relate to special, unique and extraordinary matters and that a violation of any of the terms hereof would cause irreparable injury in an amount which would be difficult or impossible to estimate or determine and for which any remedy at law would be inadequate. As such, the Parties agree that if either Party fails or refuses to fulfill any of its obligations under this Agreement or to make any payment hereunder, then the other Party shall have the remedy of specific performance, which remedy shall be cumulative and nonexclusive and shall be in addition to any other rights and remedies otherwise available at law or in equity and to which such Party might be entitled. SECTION 12.2 Certain Damages Excluded. In no event shall either Party to this Agreement, or its Affiliates, have any liability to the other Party, or its Affiliates, for any (i) loss of business opportunities or for speculative or prospective profits, or (ii) special, indirect, consequential, incidental or punitive damages, provided, however, that in the event of any breach or failure by OCC Tacoma to take and purchase the quantities of chlorine provided for hereunder, Pioneer shall be entitled to recover the difference, if any, between amounts realized from any sale in mitigation of damages resulting form such breach or failure in performance by OCC Tacoma and the amount that would have been realized by Pioneer but for such breach or failure in performance by OCC Tacoma, plus freight costs actually incurred by Pioneer and which otherwise would have been payable by OCC Tacoma pursuant to the provisions of this Agreement. SECTION 12.3 Duty to Mitigate. Each Party shall take all such reasonable actions as may be necessary to mitigate damages for which such Party may claim damages or indemnification under this Agreement, provided, however, that in no event shall Pioneer be obligated to sell and deliver chlorine committed for but not taken and purchased by OCC Tacoma to other than delivery points east of the Rocky Mountains. 15 21 ARTICLE XIII MISCELLANEOUS SECTION 13.1 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns, but neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned, by operation of law or otherwise (other than as a result of any merger or consolidation), by any Party without the prior express written consent of the other Party; provided, however, that, notwithstanding the foregoing, (i), in connection with the sale of the Tacoma Plant as a whole, or any sale of the properties and assets of any Party substantially as an entirety, to any Person, the Party making such sale may assign this Agreement, or its rights hereunder, to such Person, (ii) any Party may assign this Agreement, or its rights hereunder, to any Affiliate of such Party, and (iii) Pioneer shall have the right to collaterally assign its rights under this Agreement to any bank, financial institution or other lender (or any such entity acting as an indenture trustee on behalf of any Person) that provides financing in connection with (x) the transactions contemplated by the Asset Purchase Agreement or any Related Agreement (including any renewal, extension or rearrangement of such financing) or (y) working capital financing for Facility Operations, provided, however, that no such collateral assignment shall release, discharge or otherwise excuse Pioneer from the performance of its obligations under this Agreement; provided, further, that (A), in the case of any assignment referred to in clause (i) or (ii) of this Section 13.1, prior to any such assignment, the Person to which such assignment shall be made shall expressly assume, by an instrument in writing reasonably satisfactory to OCC Tacoma or Pioneer, as the case may be, executed and delivered to OCC Tacoma or Pioneer, as the case may be, the performance and observance of every obligation, covenant and agreement in this Agreement on the part of the Party making such assignment to be performed or observed, and (B) no such assignment shall have the effect of releasing such Party on any other Person (including any such additional Party) from its obligations, covenants or agreements under this Agreement. SECTION 13.2 Entire Agreement; Amendment. This Agreement embodies the entire agreement of the Parties hereto with respect to the subject matter hereof and supersedes all prior understandings and agreements with respect thereto. This Agreement may be amended, and any provision hereof waived, but only in writing signed by the Party against whom such amendment or waiver is sought to be enforced. No waiver by any Party of any default, misrepresentation or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any such occurrence. Neither the failure nor any delay by any Party in exercising any right, power or privilege under this Agreement will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege will preclude any further or other exercise of such right, power or privilege or the exercise of any other right, power or privilege. SECTION 13.3 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Washington, without regard to principles of conflict of 16 22 laws. The execution and delivery of this Agreement shall be deemed to be the transaction of business within the State of Washington for purposes of conferring jurisdiction upon courts located within the State of Washington. The Parties agree that any court proceedings arising out of this Agreement may be brought in the federal or state courts in the State of Washington and both Parties consent to the jurisdiction of such courts. Each Party irrevocably waives (a) any objection which such Party may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of, or relating to, this Agreement brought in any such court, (b) any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum, and (c) the right to object, with respect to any such claim, suit, action or proceeding brought in any such court, that such court does not have jurisdiction over such Party. In addition, any such suit, action or proceeding may be brought in any court having jurisdiction pursuant to the applicable law. SECTION 13.4 Notices. Any notice or communication required or permitted to be given pursuant to this Agreement shall be in writing and sent by (i) personal delivery (including courier service), (ii) telecopier to the number indicated below, or (iii) first class or registered or certified mail, postage prepaid and addressed as follows (any such notice or communication being deemed given upon receipt). If to OCC Tacoma: Occidental Chemical Corporation 5005 LBJ Freeway Dallas, Texas 75244 Attention: Vice President - Chlorine Telephone: 972-404-4195 Facsimile: 972-404-3406 If to Pioneer: Pioneer Chlor Alkali Company, Inc. 700 Louisiana Street, Suite 4200 Houston, Texas 77002 Attention: Vice President - Sales and Marketing Telephone: 713-225-3831 Facsimile: 713-225-4426 SECTION 13.5 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. 17 23 SECTION 13.6 Competition. Nothing set forth in this Agreement shall prevent either Party or any of its Affiliates from competing with the other Party or any of its Affiliates in the sale of chlorine to any Person. SECTION 13.7 Headings. The Table of Contents set forth in, and the descriptive headings of the several Articles and Sections of, this Agreement are inserted for convenience only and do not constitute a part of this Agreement. SECTION 13.8 Counterparts. This Agreement may be executed in one or more counterparts, each of which when so executed shall be deemed an original, but all of which together shall constitute one and the same instrument. SECTION 13.9 Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event any ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship or any of the provisions of this Agreement. Personal pronouns, when used in this Agreement, whether in the masculine, feminine or neutral gender, shall include all other genders and the singular shall include the plural and vice versa. SECTION 13.10 Third Party Beneficiaries. EXCEPT AS PROVIDED IN SECTION 13.1, NOTHING EXPRESSED OR IMPLIED IN THIS AGREEMENT IS INTENDED, OR SHALL BE CONSTRUED, TO CONFER UPON OR GIVE ANY PERSON OTHER THAN THE PARTIES HERETO AND THEIR SUCCESSORS AND PERMITTED ASSIGNS, ANY RIGHTS, REMEDIES OR OBLIGATIONS UNDER, OR BY REASON OF, THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. SECTION 13.11 Payments. Any payments by, or on behalf of, the Parties pursuant to any provisions of this Agreement shall be made by wire transfer of immediately available funds to a bank account of the Party receiving such payment at the bank used by such Party and each Party hereto shall furnish to the other notice of the name of its bank and the number of the account thereat to which payments shall be directed. SECTION 13.12 Incorporation of Appendices. The Appendices identified in this Agreement are incorporated herein by reference and made a part hereof. 18 24 IN WITNESS WHEREOF, the Parties have, by their duly authorized representatives, signed this Chlorine Purchase Agreement as of the day and year first above written. PIONEER CHLOR ALKALI COMPANY, INC. By: /s/ PHILIP J. ABLOVE -------------------------- Name: Philip J. Ablove Title: Vice President and Chief Financial Officer OCC TACOMA, INC. By: /s/ RICHARD A. LORRAINE -------------------------- Name: Richard A. Lorraine Title: Vice President and Chief Financial Officer 19 EX-10.15 7 ENVIRONMENTAL OPERATING AGREEMENT 1 EXHIBIT 10.15 EXECUTION COPY ================================================================================ ENVIRONMENTAL OPERATING AGREEMENT between OCC TACOMA, INC., a Delaware corporation and PIONEER CHLOR ALKALI COMPANY, INC., a Delaware corporation dated as of June 17, 1997 ================================================================================ *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 2 TABLE OF CONTENTS
PAGE ---- ARTICLE I DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . 2 Section 1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . 2 Section 1.2 References, Etc. . . . . . . . . . . . . . . . . . . . . 3 ARTICLE II ENVIRONMENTAL RESPONSIBILITIES AND OBLIGATIONS . . . . . 3 Section 2.1 Environmental Representation by OCC Tacoma . . . . . . . 3 Section 2.2 Responsibility for Excluded Environmental Conditions . . 4 Section 2.3 Responsibility for Specified Environmental Conditions . 5 Section 2.4 Responsibility for Identified Environmental Conditions and Identified Environmental Violations . . . . . . . . 7 Section 2.5 Performance of the Remediation of Excluded, Specified or Identified Environmental Conditions or the Correction of Identified Environmental Violations . . . 11 Section 2.6 Expansion of the Site by Pioneer . . . . . . . . . . . . 12 Section 2.7 Repair and Maintenance Activities by Pioneer . . . . . . 14 Section 2.8 Responsibility for Shared Obligations . . . . . . . . . 15 Section 2.9 * . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Section 2.10 Termination of Pioneer's Responsibilities and Obligations Under Article II . . . . . . . . . . . . . . 17 Section 2.11 Limitation on Pioneer's Responsibility Under Article II. 17 Section 2.12 Responsibility for Excluded Activities . . . . . . . . . 18 ARTICLE III ENVIRONMENTAL INDEMNITIES. . . . . . . . . . . . . . . . 18 Section 3.1 Indemnification by OCC Tacoma for Specified Environmental Conditions, Identified Environmental Conditions, Identified Environmental Violations, Common Law Claims and Environmental Claims . . . . . . 18 Section 3.2 Indemnification by OCC Tacoma for Remediation Damages 21 Section 3.3 Indemnification by Pioneer for Specified Environmental Conditions, Identified Environmental Conditions, Identified Environmental Violations, Environmental Claims or Other Environmental Matters . . . . . . . . 21 Section 3.4 Other Indemnification . . . . . . . . . . . . . . . . 23 Section 3.5 Termination of Pioneer's Responsibilities and Obligations Under Article III . . . . . . . . . . . . 23 ARTICLE IV CLAIM AND INDEMNITY PROCEDURES . . . . . . . . . . . . 24 Section 4.1 Notice of Environmental and Common Law Claims and Orders . . . . . . . . . . . . . . . . . . . . . . . 24
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. i 3 Section 4.2 Indemnification Procedures . . . . . . . . . . . . . . 25 Section 4.3 Payment . . . . . . . . . . . . . . . . . . . . . . . 31 Section 4.4 * . . . . . . . . . . . . . . . . . . . . . . . . . 32 Section 4.5 Exclusive Remedy for Claims Regarding Environmental Laws or Environmental Matters . . . . . . . . . . . . . . . 32 Section 4.6 * . . . . . . . . . . . . . . . . . . . . . . . . . 32 Section 4.7 Mitigation of Damages . . . . . . . . . . . . . . . . 32 Section 4.8 Limitations on Indemnification . . . . . . . . . . . . 33 ARTICLE V SITE MANAGEMENT. . . . . . . . . . . . . . . . . . . . 33 Section 5.1 Designation of Project Managers . . . . . . . . . . . 33 Section 5.2 Consultation . . . . . . . . . . . . . . . . . . . . . 34 Section 5.3 Periodic Reporting . . . . . . . . . . . . . . . . . . 34 Section 5.4 Quarterly Statements of Certain Costs and Damages by OCC Tacoma . . . . . . . . . . . . . . . . . . . . 35 Section 5.5 Statements of Certain Costs and Damages by Pioneer . . 35 Section 5.6 Right to Review . . . . . . . . . . . . . . . . . . . 35 Section 5.7 Access to the Site . . . . . . . . . . . . . . . . . . 36 Section 5.8 Access to Necessary Services and Equipment . . . . . . 36 Section 5.9 Moving of Improvements . . . . . . . . . . . . . . . . 37 Section 5.10 Exacerbation Clause for * . . . . . . . . . . . . 37 Section 5.11 Exacerbation Clause for * . . . . . . . . . . . . 39 ARTICLE VI DISPUTE RESOLUTION . . . . . . . . . . . . . . . . . . 41 Section 6.1 Dispute Resolution . . . . . . . . . . . . . . . . . . 41 Section 6.2 Informal Dispute Resolution . . . . . . . . . . . . . 41 Section 6.3 Formal Dispute Resolution . . . . . . . . . . . . . . 42 Section 6.4 Attorneys' Fees . . . . . . . . . . . . . . . . . . . 43 Section 6.5 Service of Process, Consent to Jurisdiction, Etc. . . 43 ARTICLE VII MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . 44 Section 7.1 Applicable Law . . . . . . . . . . . . . . . . . . . . 44 Section 7.2 Confidentiality . . . . . . . . . . . . . . . . . . . 44 Section 7.3 Press Releases and Public Announcements . . . . . . . 46 Section 7.4 No Third-Party Beneficiaries . . . . . . . . . . . . . 47 Section 7.5 Entire Agreement . . . . . . . . . . . . . . . . . . . 47 Section 7.6 Expenses . . . . . . . . . . . . . . . . . . . . . . . 47 Section 7.7 Notices . . . . . . . . . . . . . . . . . . . . . . . 47
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. ii 4 Section 7.8 Amendments and Waivers . . . . . . . . . . . . . . . . 48 Section 7.9 Assignment; Successors and Assigns . . . . . . . . . . 49 Section 7.10 Proposed Transfer of Any Portion of the Site by Pioneer 50 Section 7.11 Headings . . . . . . . . . . . . . . . . . . . . . . . 51 Section 7.12 Counterparts . . . . . . . . . . . . . . . . . . . . . 51 Section 7.13 Construction . . . . . . . . . . . . . . . . . . . . . 51 Section 7.14 Incorporation of Exhibits and Schedules . . . . . . . 51 Section 7.15 Denial of Liability . . . . . . . . . . . . . . . . . 51 Section 7.16 Severability . . . . . . . . . . . . . . . . . . . . . 51
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. iii 5 ENVIRONMENTAL OPERATING AGREEMENT THIS ENVIRONMENTAL OPERATING AGREEMENT, dated as of June 17, 1997, is between OCC TACOMA, INC., a Delaware corporation, and PIONEER CHLOR ALKALI COMPANY, INC., a Delaware corporation. PRELIMINARY STATEMENTS A. WHEREAS, pursuant to the Asset Purchase Agreement (as such term and certain other terms used in this Agreement with initial capital letters are defined in Article I), the Parties have provided for the sale by OCC Tacoma, and the purchase by PCI, of the right, title and interest of OCC Tacoma in the Assets; and B. WHEREAS, prior to the Closing the Asset Purchase Agreement was assigned by PCI to, and assumed by, Pioneer pursuant to Section 9.06(i) of the Asset Purchase Agreement; and C. WHEREAS, prior to May 10, 1997, OxyChem was the permittee under the RCRA Permit, through which the EPA required OxyChem to perform Remediation of certain Hazardous Materials in groundwater beneath the area located generally in the northern portion of the Site and beneath a portion of the Port Property and Roadways; and D. WHEREAS, prior to the Closing, the RCRA Permit was modified on or about May 10, 1997 to transfer such permit from OxyChem to OCC Tacoma, a wholly-owned subsidiary of OxyChem, and OCC Tacoma assumed all of the liabilities and obligations associated with such RCRA Permit; and E. WHEREAS, the Site is located within the CB/NT Site, and the EPA has alleged, pursuant to CERCLA, that OxyChem is a PRP for Remediation of the Hylebos Waterway of the CB/NT Site; and F. WHEREAS, on September 30, 1989, the EPA issued a Record of Decision selecting a remedial action for the CB/NT Site which addresses certain Hazardous Materials allegedly Released at the CB/NT Site, including those allegedly Released from the Site; and G. WHEREAS, on November 29, 1993, OxyChem entered into the Hylebos AOC with the EPA, which requires OxyChem and other designated PRPs to perform certain Remediation in the Hylebos Waterway of the CB/NT Site; and *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 1 6 H. WHEREAS, historic operations at the Site by OxyChem and other owners and operators of the Site have allegedly Released Hazardous Materials into the soil, surface water, groundwater and intertidal and subtidal sediments at, and in the vicinity of, the Site; and I. WHEREAS, as of February 1, 1997, pursuant to the provisions of the Assignment and Assumption Agreement, OCC Tacoma assumed all obligations and liabilities of OxyChem, if any, associated with the past and present ownership and operation of the Site and with the CB/NT Site, the PRI Property and the Upland Waste Disposal Facilities; and J. WHEREAS, this Agreement shall neither constitute, nor be interpreted, construed or used as evidence of, any admission of liability, law or fact, or a waiver of any right or defense, by OCC Tacoma or Pioneer or their respective Affiliates, and each of the Parties denies that it or any of its respective Affiliates or Representatives, or the Site, has caused or contributed to, will cause or contribute to, or has or will have any responsibility for any damage or injury to Persons, property, natural resources or the environment; and K. WHEREAS, the Parties desire to specify and allocate, as between themselves, each Party's obligations and liabilities after the Closing pursuant to Environmental Laws, including those for Remediation of the CB/NT Site, the PRI Property, and the Upland Waste Disposal Facilities, and those for Remediation of Environmental Conditions and Correction of Environmental Violations, if any, associated with the past and future ownership or operation of the Site, and each Party's obligations and liabilities, if any, with respect to common law tort or contribution claims relating to Environmental Matters; NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: ARTICLE I DEFINITIONS SECTION 1.1 CERTAIN DEFINED TERMS. Capitalized terms used in this Agreement and not otherwise defined herein shall have the respective meanings set forth in Annex A. *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 2 7 SECTION 1.2 REFERENCES, ETC. The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All terms defined in Annex A or in any other provision of this Agreement in the singular shall have the same meanings in the plural and vice versa. All pronouns, nouns and other terms used in this Agreement shall include the masculine, feminine and neuter forms thereof, wherever appropriate to the context. All references herein to Articles, Sections, Subsections, clauses, Annexes, Exhibits and Schedules shall, unless the context requires a different construction, be deemed to be references to the Articles, Sections, Subsections and clauses of this Agreement and the Annexes, Exhibits and Schedules attached hereto and made a part hereof. In this Agreement, unless a clear contrary intention appears, the word "including" (and with correlative meaning "include") means including, without limiting the generality of any description preceding such term. All accounting terms not specifically defined herein shall be construed in accordance with GAAP. ARTICLE II ENVIRONMENTAL RESPONSIBILITIES AND OBLIGATION SECTION 2.1 ENVIRONMENTAL REPRESENTATION BY OCC TACOMA. (a) Representation of OCC Tacoma. OCC Tacoma represents that, except as identified in Schedule 1 attached hereto, to the Knowledge of OCC Tacoma, the Assets are operated as of the date of this Agreement in compliance with applicable Environmental Laws, and with Permits issued thereunder, except where non-compliance would not result in a material adverse change, with respect to the business, financial condition, results of operations or prospects (in the case of prospects, not taking into account general economic conditions or general industry developments) of the Assets or the business and operations conducted at the Facility on the date of this Agreement, of * . OCC Tacoma and its Affiliates make no other representation or warranty regarding the compliance of the Assets with Environmental Laws and Permits and, except for any representations and warranties set forth in the Asset Purchase Agreement or any Related Agreement, disclaim all liability and responsibility for any representation, warranty, statement or information made or communicated (orally or in writing) to Pioneer or its Affiliates or their respective Representatives (including any opinion, information, projection, estimate, financial statement or advice that may be or may have been provided to Pioneer by OCC Tacoma or any of its Affiliates or any of their respective Representatives). *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 3 8 (b) Survival of Representation. The representation in Subsection 2.1(a) above will expire on the second (2nd) Anniversary. Except with the written consent of OCC Tacoma as provided in Section 7.10 herein, the representation in Subsection 2.1(a) shall not run in favor of or inure to the benefit of any successor or assign of Pioneer Chlor Alkali Company, Inc. or its Affiliates. (c) Remedy for Breach of Representation. A claim for breach of this representation may be made solely and exclusively as an Indemnity Claim for an Identified Environmental Violation, and, except for the two-year survival period in Subsection (b) above, is subject to the same Early Sunset Date, Maximum Sunset Date and Aggregate OCC Tacoma Liability Limit as Identified Environmental Violations, and all other procedures and limitations applicable to Identified Environmental Violations (including the requirement of this Agreement that a Penalty Claim must be subject to an Order prior to the fifth (5th) Anniversary or a Formal Agency Action prior to the third (3rd) Anniversary to be deemed an Identified Environmental Violation). OCC Tacoma's indemnification for Identified Environmental Violations under Subsection 3.1(c) hereof shall be the sole remedy of Pioneer for breach of this representation, and Pioneer hereby waives any other statutory, equitable or common law remedy, whether alternative or cumulative, and any other remedy under this Agreement, the Asset Purchase Agreement, any Related Agreement or any other agreement, for any such breach. SECTION 2.2 RESPONSIBILITY FOR EXCLUDED ENVIRONMENTAL CONDITIONS. As between the Parties, and subject to the other provisions and limitations set forth in this Agreement, the Parties agree to allocate responsibility for Excluded Environmental Conditions as set forth in this Section 2.2. (a) Responsibility of OCC Tacoma Generally for Excluded Environmental Conditions. OCC Tacoma agrees to perform, either individually or in conjunction with any of its Affiliates or a PRP Group, Remediation of an Excluded Environmental Condition (and/or to pay Response Costs therefor) required by Administrative Orders or Court Orders in Material Compliance with such Orders, commencing at the Closing, except to the extent that Pioneer has liability or responsibility for such Excluded Environmental Condition as specified in clause (b) below. The obligations of OCC Tacoma under this Section 2.2(a), if any, shall survive the Closing and continue in perpetuity, shall be personal to Pioneer Chlor Alkali Company, Inc. and its Affiliates, and shall not be assignable or transferable to any other Person. (b) Responsibility of Pioneer for Excluded Environmental Conditions. Pioneer agrees to perform, either individually or in conjunction with its Affiliates or a PRP Group, necessary Remediation of an Excluded Environmental Condition (and/or *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 4 9 to pay Response Costs therefor) required by Administrative Orders or Court Orders in Material Compliance with such Orders, to the extent such obligations arise from Releases into the Non-Hylebos Area or on or at the Upland Waste Disposal Facilities that were generated by or originated from (i) activities or operations of Pioneer or its Affiliates or Representatives, (ii) activities, operations, events or occurrences (A) on the Site after the Closing, other than Excluded Activities or Treatment System Operation (other than Improper Treatment System Operations), or (B) on any other real or personal property owned or operated by Pioneer or its Affiliates, or (iii) Improper Treatment System Operation. * SECTION 2.3 RESPONSIBILITY FOR SPECIFIED ENVIRONMENTAL CONDITIONS. As between the Parties, and subject to the other provisions and limitations set forth in this Agreement, the Parties agree to allocate responsibility for Specified Environmental Conditions as set forth in this Section 2.3. (a) Responsibility of OCC Tacoma Generally for Specified Environmental Conditions. OCC Tacoma agrees to perform, either individually or in conjunction with any of its Affiliates or a PRP Group, necessary Remediation (and/or to pay Response Costs therefor) of each Specified Environmental Condition required by Administrative Orders or Court Orders in Material Compliance with such Orders, for a period commencing at the Closing and expiring on the Applicable Sunset Date for such Specified Environmental Condition. On the Applicable Sunset Date, any obligations of OCC Tacoma or any of its Affiliates with respect to such Specified Environmental Condition, including OCC Tacoma's obligations under Section 3.1 with respect thereto, shall cease automatically and shall be of no further force and effect, except for payments to Pioneer Indemnified Persons (i) then due and payable and not in dispute pursuant to any pending Indemnity Claim accepted by OCC Tacoma, if any, for Remediation of such Specified Environmental Condition (and/or payment of Response Costs therefor), or (ii) subsequently determined in dispute resolution or litigation to have been due and payable pursuant to any pending Indemnity Claim for Remediation of such Specified Environmental Condition (and/or payment of Response Costs therefor) in dispute on such Applicable Sunset Date. (b) Conveyance of Improvements Used in the Remediation of the Specified Environmental Conditions. On the Applicable Sunset Date for each Specified Environmental Condition, OCC Tacoma shall, or shall cause its Affiliates to, convey to Pioneer, and Pioneer shall, or shall cause its Affiliates to, acquire from OCC Tacoma and its Affiliates, AS-IS, WHERE-IS, WITH ALL FAULTS and with no representations or warranties, for the price of $10: (i) all of the Improvements then owned by OCC Tacoma or its Affiliates and located at or in the vicinity of the Site and used exclusively by OCC Tacoma or its Affiliates (or the extent of OCC Tacoma's right, title and interest in such improvements owned and used by a PRP Group) in *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 5 10 Remediating such Specified Environmental Condition, and (ii) to the extent allowed by applicable Governmental Authorities after reasonably diligent efforts by the Parties, any permits held by or on behalf of OCC Tacoma or any of its Affiliates therefor; provided in each case that (1) Pioneer is not in material breach of its obligations under this Agreement, (2) OCC Tacoma has not been required by a Governmental Authority pursuant to applicable Orders or Formal Agency Actions to remove, close or abandon such Improvements or to relinquish such permits prior to the Applicable Sunset Date as a condition of receiving a Discharge of or Approval Letter for the Specified Environmental Condition, and (3) Pioneer shall indemnify, defend and hold harmless OCC Tacoma and OCC Tacoma Indemnified Persons pursuant to Section 3.3. and Article IV, but excluding Section 4.8, from and against any Damages for Remediation of the Specified Environmental Condition, whether or not Pioneer acquires such Improvements and permits from OCC Tacoma (including Damages for any failure to acquire such Improvements and permits). Pioneer shall pay all transfer taxes, fees and costs, if any, imposed by a Governmental Authority or Third Party associated with the transfer of such Improvements and permits. (c) Responsibility of Pioneer for Specified Environmental Conditions Prior to the Applicable Sunset Date. Prior to the Applicable Sunset Date and subject to Section 2.5(e), in the event that Pioneer, its Affiliates or Representatives, or activities, operations, events or occurrences on the Site after the Closing, other than Excluded Activities or Treatment System Operation (other than Improper Treatment System Operation), either (i) Release Hazardous Materials or other substances or materials that mix or commingle with a Specified Environmental Condition, or (ii) otherwise directly cause an increase in the cost or scope of the Remediation of a Specified Environmental Condition, Pioneer in each case agrees to pay to OCC Tacoma the portion of the Direct Cost incurred by OCC Tacoma or any of its Affiliates to address any such Release and any such increased cost or scope of Remediation and/or Response Costs with respect to such Specified Environmental Condition. * . (d) Responsibility of Pioneer for Specified Environmental Conditions After the Applicable Sunset Date. From and after the Applicable Sunset Date for each Specified Environmental Condition, Pioneer agrees to, or to cause its Affiliates, successors or permitted assigns to, (1) perform all Remediation of such Specified Environmental Condition required by Administrative Orders or Court Orders in Material Compliance with such Orders and/or to pay Response Costs for such Specified Environmental Condition, (2) diligently take all reasonable actions necessary to substitute itself for OCC Tacoma and its Affiliates with respect to any Orders, Formal Agency Actions or Remediation Claims applicable to such Specified Environmental Condition, and (3) indemnify, defend and hold harmless OCC Tacoma and OCC Tacoma Indemnified Persons pursuant to Section 3.3 and Article IV, but excluding Section 4.8, from and against any Damages for Remediation of (and/or Response Costs *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 6 11 for) the Specified Condition (including any Damages arising from failure to perform clauses (1) or (2) above and from failure to accomplish complete substitution of Pioneer or its Affiliates for OCC Tacoma and its Affiliates with respect to any Orders, Formal Agency Actions or Remediation Claims). SECTION 2.4 RESPONSIBILITY FOR IDENTIFIED ENVIRONMENTAL CONDITIONS AND IDENTIFIED ENVIRONMENTAL VIOLATIONS. As between the Parties, and subject to the other provisions and limitations set forth in this Agreement, the Parties agree to allocate responsibility for Identified Environmental Conditions or Identified Environmental Violations as set forth in this Section 2.4. (a) Responsibility of OCC Tacoma for Identified Environmental Conditions and Identified Environmental Violations. OCC Tacoma agrees to perform Remediation of Identified Environmental Conditions (and/or to pay Response Costs therefor), and to perform Correction of Identified Environmental Violations (and/or to pay Penalties assessed therefor), in each case required by Administrative Orders or Court Orders and in Material Compliance with such Orders, for a period commencing upon the receipt of an Order Notice from Pioneer identifying such Identified Environmental Condition or Identified Environmental Violation and expiring on the Applicable Sunset Date for such Identified Environmental Condition or Identified Environmental Violation, subject to the limitations set forth in Subsection (b) below. On the Applicable Sunset Date, any obligations of OCC Tacoma or any of its Affiliates with respect to such Identified Environmental Condition or Identified Environmental Violation, including OCC Tacoma's obligations under Section 3.1 with respect thereto, shall cease automatically and shall be of no further force and effect, except for payments to Pioneer Indemnified Persons (i) then due and payable and not in dispute pursuant to any pending Indemnity Claim accepted by OCC Tacoma, if any, for Remediation of such Identified Environmental Condition (and/or payment of Response Costs therefor) or for Correction of such Identified Environmental Violation (and/or payment of Penalties therefor), or (ii) subsequently determined in dispute resolution or litigation to have been due and payable pursuant to any pending Indemnity Claim for Remediation of such Identified Environmental Condition (and/or payment of Response Costs therefor) or for Correction of such Identified Environmental Violation (and/or payment of Penalties therefor), which Indemnity Claim is in dispute on such Applicable Sunset Date. *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 7 12 (b) Limitations on OCC Tacoma's Obligations Regarding Identified Environmental Conditions and Identified Environmental Violations. (i) OCC Tacoma shall have no responsibility to Remediate any Identified Environmental Condition (or to pay Response Costs therefor), to Correct any Identified Environmental Violation (or to pay Penalties assessed therefor), or to indemnify, defend and hold Pioneer harmless from and against any liability incurred by Pioneer to perform such Remediation or Correction thereof (or to pay any Response Costs or Penalties therefor): (A) to the extent that an Identified Environmental Condition or an Identified Environmental Violation is identified by, or the Order requiring Remediation or payment of Response Costs, on the one hand, or Correction or payment of Penalties, on the other hand, arises from: (1) tests or samples of surface water, groundwater, sediment, or soil performed voluntarily by, on behalf of, or with the permission of, Pioneer, except (i) as expressly required by applicable Orders, Environmental Laws or permits issued thereunder, or (ii) as expressly provided in Sections 2.6 or 2.7 below; (2) reports or other communications made voluntarily with any Governmental Authority by or on behalf of Pioneer, except (i) as expressly required by applicable Environmental Laws, Orders or permits issued thereunder, or (ii) as expressly provided in Sections 5.10(b)(v) and 5.11(c)(ii) below; provided, however, that any such reports or communications alleging the discovery or existence of an Identified Environmental Condition or Identified Environmental Violation or requesting an investigation or inspection or Remediation of the Site by a Governmental Authority or Third Party may only be made to the extent expressly required by applicable Orders, Environmental Laws or permits issued thereunder; or (3) any requirements under any permit issued or interim status granted under RCRA to Pioneer, its Affiliates, successors or permitted assigns to allow reconstruction of facilities other than the groundwater treatment system or construction or operation of new facilities or units for storage, treatment or disposal of hazardous waste at the Site after the Closing, other than Excluded Activities; or (4) Improper Treatment System Operation; or (5) an Expansion or Repair, * or *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 8 13 (B) if the Remediation of such Identified Environmental Condition (or the payment of Response Costs therefor) and any Damages (other than Remediation Damages) incurred by Pioneer Indemnified Persons to perform such Remediation pursuant to applicable Orders, or the Correction of such Identified Environmental Violation (or payment of Penalties assessed therefor) and any Damages (other than Remediation Damages) incurred by Pioneer Indemnified Persons for such Correction pursuant to applicable Orders, is in an amount less than * . (ii) In addition to clause (i) above, OCC Tacoma shall have no responsibility to Remediate an Identified Environmental Condition (or to pay Response Costs therefor), to Correct an Identified Environmental Violation (or to pay Penalties assessed therefor), or to indemnify, defend and hold Pioneer harmless from and against Damages incurred by Pioneer to perform such Remediation or Correction thereof (or to pay the Response Costs or Penalties therefor), and any such responsibility or indemnification or defense obligation of OCC Tacoma for such Identified Environmental Condition or Identified Environmental Violation shall cease automatically and be of no further force and effect, in any of the following circumstances: (A) with respect to a particular Identified Environmental Condition or Identified Environmental Violation, on the Applicable Sunset Date for such Identified Environmental Condition or Identified Environmental Violation; or (B) in any event, notwithstanding any other provision of this Agreement, when the Aggregate OCC Tacoma Liability reaches the Aggregate OCC Tacoma Liability Limit. (c) Conveyance of Improvements Used in the Remediation of Identified Environmental Conditions. On the Applicable Sunset Date for each Identified Environmental Condition, OCC Tacoma shall, or shall cause its Affiliates to, convey to Pioneer, and Pioneer shall, or shall cause its Affiliates to, acquire from OCC Tacoma, AS-IS, WHERE-IS, WITH ALL FAULTS and with no representations or warranties, for a price of $10: (i) all of the Improvements then owned by OCC Tacoma or its Affiliates and located at the Site and used exclusively by OCC Tacoma or its Affiliates (or the extent of OCC Tacoma's right, title and interest in such improvements owned and used by a PRP Group) in Remediating such Identified Environmental Condition, and (ii) to the extent allowed by applicable Governmental Authorities after reasonably diligent efforts by the Parties, any permits held by or on behalf of OCC Tacoma therefor; provided in each case that (1) Pioneer is not in material breach of its obligations under this Agreement, (2) OCC Tacoma has not been required by a Governmental Authority pursuant to applicable Orders or Formal Agency *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 9 14 Actions to remove, close or abandon such Improvements or to relinquish such permits prior to the Applicable Sunset Date as a condition of receiving a Discharge of or Approval Letter for such Identified Environmental Condition, and (3) Pioneer shall indemnify, defend and hold harmless OCC Tacoma and OCC Tacoma Indemnified Persons pursuant to Section 3.3 and Article IV, but excluding Section 4.8, from and against any Damages for Remediation of Identified Conditions whether or not Pioneer acquires such Improvements and permits from OCC Tacoma (including Damages for any failure to acquire such Improvements and permits). Pioneer shall pay all sales and transfer taxes, fees and costs, if any, imposed by a Governmental Authority or Third Party associated with the transfer of such Improvements and permits. (d) Responsibility of Pioneer for Identified Environmental Conditions and Identified Environmental Violations Prior to the Applicable Sunset Date. Prior to the Applicable Sunset Date and subject to Sections 2.5(e) and 2.8(d), in the event that Pioneer, its Affiliates or Representatives, or activities, operations, events or occurrences on the Site after the Closing, other than Excluded Activities or Treatment System Operation (other than Improper Treatment System Operation), either (i) Release Hazardous Materials or other substances or materials that mix or commingle with an Identified Environmental Condition, or (ii) otherwise directly cause an increase in the cost or scope of the Remediation of and/or Response Costs for an Identified Environmental Condition or the Correction of and/or Penalties for an Identified Environmental Violation, Pioneer in each case agrees to pay to OCC Tacoma the portion of the Direct Cost incurred by OCC Tacoma or any of its Affiliates to address any such Release and any such increased cost or scope of Remediation and/or Response Costs with respect to such Identified Environmental Condition or any such increased cost or scope of Correction and/or Penalties with respect to such Identified Environmental Violation. * (e) Responsibility of Pioneer for Identified Environmental Conditions and Identified Environmental Violations After the Applicable Sunset Date. From and after the Applicable Sunset Date for each Identified Environmental Condition and each Identified Environmental Violation, Pioneer agrees to, or to cause its Affiliates, successors or permitted assigns to, (1) perform all Remediation of such Identified Environmental Condition required by Administrative Orders or Court Orders in Material Compliance with such Orders and/or to pay Response Costs for such Identified Environmental Condition, and to Correct such Identified Environmental Violation required by Administrative Orders or Court Orders in Material Compliance with such Orders and/or to pay Penalties for such Identified Environmental Violation, (2) diligently take all reasonable actions necessary to substitute itself for OCC Tacoma and its Affiliates with respect to any Orders, Formal Agency Actions, Remediation Claims or Penalty Claims applicable to such Identified Environmental Condition or Identified Environmental Violation, and (3) indemnify, defend and hold harmless OCC *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 10 15 Tacoma and OCC Tacoma Indemnified Persons pursuant to Section 3.3 and Article IV, but excluding Section 4.8, from and against any Damages for Remediation of (and/or Response Costs for) the Identified Environmental Condition or for Correction of (and/or Penalties for) the Identified Environmental Violation (including any Damages arising from failure to perform clauses (1) or (2) above and the failure to accomplish complete substitution of Pioneer or its Affiliates for OCC Tacoma and its Affiliates with respect to any Orders, Formal Agency Actions or Remediation Claims). SECTION 2.5 PERFORMANCE OF THE REMEDIATION OF EXCLUDED, SPECIFIED OR IDENTIFIED ENVIRONMENTAL CONDITIONS OR THE CORRECTION OF IDENTIFIED ENVIRONMENTAL VIOLATIONS. As between OCC Tacoma and Pioneer, and during the period in which OCC Tacoma or Pioneer or any of their respective successors or permitted assigns is responsible for the Remediation of any Excluded, Specified or Identified Environmental Condition or for the Correction of any Identified Environmental Violation: (a) If either Party or any of their Affiliates is required by applicable Orders to Remediate any Excluded, Specified or Identified Environmental Condition or to Correct any Identified Environmental Violation, such Party (or its Affiliates) shall be required to meet * . (b) To the extent that Pioneer, its Affiliates or Representatives, or activities, operations, events or occurrences on the Site after the Closing, other than Excluded Activities or Treatment System Operation (other than Improper Treatment System Operation), Release Hazardous Materials or other substances or materials, and such Release leads a Governmental Authority to require additional Remediation, after the expiration of the Applicable Sunset Date, of a Specified Environmental Condition or Identified Environmental Condition previously Remediated by OCC Tacoma or any of its Affiliates, Pioneer agrees to Remediate such Environmental Condition (including the portion arising solely from Releases prior to the Closing). To the extent that such Release leads a Governmental Authority to require additional Remediation, prior to the expiration of the Applicable Sunset Date, of a Specified Environmental Condition or Identified Environmental Condition, in either case previously Remediated or then being Remediated by OCC Tacoma or any of its Affiliates, OCC Tacoma agrees to perform (and/or to pay Response Costs of) the portion of the additional Remediation of the Environmental Condition solely attributable to Releases prior to the Closing pursuant to applicable Orders (and until the Applicable Sunset Date), and Pioneer agrees to perform (or pay Response Costs of) the remainder of the Remediation, including any necessary repair, movement, relocation or functional replacement of Improvements required to perform any additional Remediation. *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 11 16 (c) After consultation pursuant to Section 5.2, Pioneer shall execute all documents requested or required of Pioneer by Governmental Authorities and all documentation reasonably requested by OCC Tacoma (or its designated Affiliates) to perform the Remediation required under this Agreement, including written acknowledgments by Pioneer (in form and substance reasonably satisfactory to OCC Tacoma) stating that: (i) consistent with the Deed, the Site shall remain in heavy industrial use; * . (d) Pioneer will permit, and will not contest, the items specified in clauses (c)(i), (ii), (iv), (v) and (vi) above, and will not contest the item specified in clause c(iii) above, provided, in each case, that OCC Tacoma has engaged in consultation pursuant to Section 5.2. (e) In the context of OCC Tacoma's performing (or payment of Response Costs in lieu thereof) Remediation of a Specified Environmental Condition or an Identified Environmental Condition, OCC Tacoma agrees that, prior to the Applicable Sunset Date, Pioneer shall not be required to participate in or pay for (or to indemnify and defend OCC Tacoma against) such Remediation solely because of the presence of Hazardous Materials, or substances or materials other than Hazardous Materials, that are mixed or commingled with the Hazardous Materials being Remediated as a Specified Environmental Condition or an Identified Environmental Condition, except to the extent that (i) Pioneer, its Affiliates or Representatives, or activities, operations, events or occurrences on the Site after the Closing, other than Excluded Activities or Treatment System Operation (other than Improper Treatment System Operation), Release such Hazardous Materials, substances or materials and (ii) those Hazardous Materials, substances or materials increase the cost or scope of OCC Tacoma's Remediation of such Specified Environmental Condition or Identified Environmental Condition. Subject to the provisions of Section 5.2 below, nothing in this Agreement shall prohibit OCC Tacoma from acting to prevent or minimize such mixing or commingling with the Hazardous Materials being Remediated as a Specified Environmental Condition or an Identified Environmental Condition, or shall require OCC Tacoma to Remediate such other Hazardous Materials, substances or materials which can be left in place during Remediation activities of OCC Tacoma, if consistent with applicable Orders. SECTION 2.6 EXPANSION OF THE SITE BY PIONEER. (a) Pioneer may Expand on the Site without notice to or consent of OCC Tacoma, provided that such Expansion (i) does not disturb or require disturbance, excavation or Remediation of the soil, sediment or groundwater at the Site or the sediment or groundwater in the Hylebos Area; (ii) is not located in Remediation Areas of the Site, and (iii) does not materially delay or interfere with the Remediation *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 12 17 of Excluded, Specified or Identified Environmental Conditions or the Correction of Identified Environmental Violations by OCC Tacoma or any of its Affiliates, or materially delay or interfere with the other actions of OCC Tacoma required pursuant to this Agreement. (b) Pioneer may Expand on the Site, or move or relocate any Improvements which disturb or require the disturbance, excavation or Remediation of the soil, sediment or groundwater at, or in the vicinity of, the Site, outside of Remediation Areas in a reasonable manner after consultation pursuant to Section 5.2 and provided that Pioneer uses reasonably diligent efforts to mitigate any Damages. * To the extent that any such Expansion materially delays or interferes with Remediation being performed by OCC Tacoma pursuant to this Agreement, Pioneer agrees to pay to OCC Tacoma the Direct Cost of such delay or interference. (c) If and to the extent that Pioneer encounters Hazardous Materials while conducting Expansion, Pioneer shall be solely responsible for the additional cost directly caused by such Hazardous Materials, except to the extent that the Hazardous Materials encountered by Pioneer (A) originated from a pre-Closing Release, (B) are discovered during the performance of Expansion; and (C) directly increase the Direct Costs of such Expansion by an identifiable incremental amount due to costs required for compliance with the least stringent standards allowable pursuant to Environmental Laws, in which case * and the provisions of Section 2.1 through 2.5, inclusive, shall not be applicable to such incremental portion of Direct Costs until the Applicable Sunset Date. (d) In the event any Person other than Pioneer Chlor Alkali Company, Inc. or its Affiliates conducts an Expansion, such Person shall be obligated to pay the costs and perform the Remediation * it being the express intent of the parties that * this Section 2.6 shall be personal to Pioneer Chlor Alkali Company, Inc. and its Affiliates and shall not be assignable or transferrable to any other Person. *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 13 18 SECTION 2.7 REPAIR AND MAINTENANCE ACTIVITIES BY PIONEER. (a) Pioneer may conduct Repair at the Site, without notice to or consent of OCC Tacoma, provided that such Repair (i) does not disturb or require disturbance, excavation or Remediation of the soil, sediment or groundwater at the Site or the sediment or groundwater in the Hylebos Area, and (ii) does not materially delay or interfere with the Remediation of Excluded, Specified or Identified Environmental Conditions or the Correction of Identified Environmental Violations by OCC Tacoma or any of its Affiliates, or the other actions of OCC Tacoma required pursuant to this Agreement. Pioneer may conduct Repair which disturbs or requires the disturbance, excavation or Remediation of the soil, sediment or groundwater at, the Site or the sediment or groundwater in the Hylebos Area, outside of the Remediation Areas, if such Repair is performed in a reasonably diligent manner in the ordinary course of business, after providing such consultation pursuant to Section 5.2 below as is practicable under the circumstances. Pioneer may conduct Repair which disturbs or requires the disturbance, excavation or Remediation of the soil, sediment or groundwater at the Site, within the Remediation Areas, if such Repair is performed in a reasonable manner in the ordinary course of business, after providing notice to OCC Tacoma and consultation pursuant to Section 5.2, except in emergencies where such notice and consultation will be provided as soon as practicable. (b) If Pioneer encounters Hazardous Materials in the subsurface at the Site related to pre-Closing Releases while conducting Repair, the following provisions apply: (i) * (ii) * (iii) * (c) To the extent that the Repair pursuant to this Section occurs before the * and results in the discovery of a Pre-Closing Release of Hazardous Materials which (i) increases the cost or scope of the Remediation of a Specified Environmental Condition or previously Identified Environmental Condition (unless the Applicable Sunset Date for such condition has previously occurred), the cost of Remediation of such Specified Environmental Condition and previously Identified Environmental Condition (or the increased Direct Cost thereof) will be * ; or (ii) gives rise to an Identified Environmental Condition, the cost of Remediation of such Identified Environmental Condition will be * . *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 14 19 (d) In the event any Person other than Pioneer Chlor Alkali Company, Inc. or its Affiliates conducts a Repair, such Person shall be obligated to pay the costs and perform the Remediation * , it being the express intent of the Parties that the obligations of OCC Tacoma under this Section 2.7 shall be personal to Pioneer Chlor Alkali Company, Inc. and its Affiliates and shall not be assignable or transferrable to any other Person. SECTION 2.8 RESPONSIBILITY FOR SHARED OBLIGATIONS. (a) In the event that there is a Release of a Hazardous Material or a material or substance other than a Hazardous Material at the Site after the Closing, other than by an Excluded Activity or by Treatment System Operation (other than Improper Treatment System Operation), which directly causes mixing or commingling with Hazardous Materials present in a Specified Environmental Condition or an Identified Environmental Condition being Remediated by or on behalf of OCC Tacoma, and which, subject to Section 2.11 below, increases the cost or scope of the Remediation of such Specified Environmental Condition or increases the cost or scope of the Remediation of such Identified Environmental Condition, Pioneer or its successors or assigns or their respective Affiliates agrees to pay to OCC Tacoma the Direct Cost (including the portion of the actual increased cost of operation and maintenance directly caused by such Release and any additional capital cost) incurred by OCC Tacoma and directly caused by such Release. (b) To the extent that OCC Tacoma or any of its Affiliates is Remediating a Specified Environmental Condition or an Identified Environmental Condition, OCC Tacoma is also required until the Applicable Sunset Date to Remediate * with respect to such Specified Environmental Condition or Identified Environmental Condition, in Material Compliance with applicable Orders, except to the extent that (i) Pioneer, its Affiliates or Representatives, or activities, operations, events or occurrences on the Site after the Closing other than Excluded Activities or Treatment System Operation (other than Improper Treatment System Operation), Release * , and (ii) such Release increases OCC Tacoma's Direct Cost in an amount which reaches the threshold in Section 2.11. * (c) To the extent that a Release by either Party or its Affiliates, successors or permitted assigns, or which occurs on, at or from the Site, after the Closing leads a Governmental Authority to require additional Remediation, prior to the *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 15 20 expiration of the Applicable Sunset Date, of a Specified Environmental Condition or an Identified Environmental Condition previously Remediated by OCC Tacoma or any of its Affiliates or by Pioneer or its Affiliates, successors or assigns, OCC Tacoma agrees to perform (and/or to pay Response Costs of) the Remediation pursuant to applicable Orders of the portion of the Environmental Condition solely attributable to either pre-Closing Releases or post-Closing Releases (in either case until the Applicable Sunset Date) directly caused by Excluded Activities or Treatment System Operation (other than Improper Treatment System Operation), and Pioneer agrees to perform (and/or to pay Response Costs of) the Remediation pursuant to applicable Orders (including repair, movement, relocation or functional replacement of Improvements installed, constructed or used in the previous Remediation by OCC Tacoma) solely attributable to post-Closing Releases not directly caused by Excluded Activities or Treatment System Operation (other than Improper Treatment System Operation). (d) (i) Subject to Sections 2.3(c), 2.4(d), 2.5(b), 2.5(e), 3.3(a), 3.3(b) and 4.8(c), commencing upon Closing, Pioneer agrees to perform Remediation of Post-Closing Environmental Conditions (and/or to pay Response Costs therefor) and to Correct Post-Closing Environmental Violations (and/or to pay Penalties therefor) which in each case is directly caused by (x) activities or operations of Pioneer or its Affiliates or Representatives, or (y) activities, operations, events or occurrences (I) on the Site after the Closing, other than Excluded Activities or Treatment System Operation (other than Improper Treatment System Operation), or (II) on any other real or personal property owned or operated by Pioneer or its Affiliates, and in each case as required by Orders and in Material Compliance with such Orders. Subject to Section 2.12, OCC Tacoma agrees to perform Remediation of Post- Closing Environmental Conditions (and/or to pay Response Costs therefor) and to Correct Post-Closing Environmental Violations (and/or to pay Penalties therefor), which in each case is directly caused by Excluded Activities and Treatment System Operation (other than Improper Treatment System Operation) and in each case as required by Orders and in Material Compliance with such Orders. (ii) The obligations of Pioneer and OCC Tacoma under subsection (d)(i) shall be limited as follows: Pioneer's and OCC Tacoma's relative responsibilities for Post-Closing Environmental Conditions directly caused by Treatment System Operation shall be governed by the Operating Services Agreement, provided that Pioneer shall in no event be entitled to receive Remediation Damages which result from its improper operation of the groundwater treatment system. In addition, OCC Tacoma's responsibility for Excluded Activities and Treatment System Operation, including any Post-Closing Environmental Conditions and Post-Closing Environmental Violations directly caused thereby and any Remediation Damages therefrom, shall terminate as set forth in Section 2.12. *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 16 21 (e) Subject to Sections 2.3(c), 2.4(d), 2.5(b), 2.5(e), 3.3(a), 3.3(b) and 4.8(c), commencing upon Closing, Pioneer agrees to perform Remediation of Pre-Closing Environmental Conditions (and/or to pay Response Costs therefor) directly caused by substances or materials that (i) are not Hazardous Materials on the date of this Agreement as defined in this Agreement and (ii) are subsequently defined, identified or listed as "hazardous substances" or "hazardous wastes" pursuant to Environmental Laws, in either case required by Orders and in Material Compliance with such Orders, to the extent that such substances or materials are not mixed or commingled with Hazardous Materials being Remediated by OCC Tacoma in accordance with Sections 2.5(e) and 2.8(b). (f) If the Parties disagree regarding the allocation of responsibility for (i) Remediation of Environmental Conditions, (ii) Releases of Hazardous Materials and/or other substances or materials, (iii) the increased cost or scope of Remediation thereof or delay of or interference with such Remediation, (iv) payment of Response Costs, (v) Correction of Environmental Violations, or (vi) payment of Penalties for Environmental Violations, such disagreement shall be submitted to dispute resolution pursuant to Article VI below. SECTION 2.9 * SECTION 2.10 TERMINATION OF PIONEER'S RESPONSIBILITIES AND OBLIGATIONS UNDER ARTICLE II. Pioneer's responsibility under this Article II shall terminate on * , at which time Pioneer's obligations under Article II shall cease automatically and be of no further force and effect; except for (x) payments to OCC Tacoma Indemnified Persons then due and payable and not in dispute pursuant to any pending Indemnity Claim accepted by Pioneer, if any, (y) payments to OCC Tacoma Indemnified Persons subsequently determined in dispute resolution or litigation to have been due and payable pursuant to any pending Indemnity Claim in dispute on such termination date, and (z) satisfaction of the obligation of Pioneer to substitute itself for OCC Tacoma and its Affiliates for the matters set forth in Subsections 2.3(c) and 2.4(c); and, provided, further, that the rights of Pioneer under this Section 2.10 shall be personal to Pioneer Chlor Alkali Company, Inc. and its Affiliates and shall not be assignable or transferable to any other Person, notwithstanding any other provision of this Agreement. SECTION 2.11 LIMITATION ON PIONEER'S RESPONSIBILITY UNDER ARTICLE II. Prior to the Applicable Sunset Date, Pioneer shall not be obligated to bear or pay Damages, to perform any Remediation (and/or to pay Response Costs therefor), or to perform Correction (and/or pay Penalties therefor), as the case may be, pursuant to Subsections *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 17 22 2.3(c), 2.4(d), 2.5(e), 2.6(b), 2.8(a) and 2.8(b) unless for any Specified Environmental Condition, Identified Environmental Condition or Identified Violation subject thereto, the Damages incurred by OCC Tacoma Indemnified Persons pursuant to Orders are in an amount greater than or equal to * . SECTION 2.12 RESPONSIBILITY FOR EXCLUDED ACTIVITIES. Subject to the other provisions and limitations set forth in this Agreement (except for Section 4.8), OCC Tacoma agrees to perform, either individually or in conjunction with any of its Affiliates or a PRP Group, Remediation of Post- Closing Environmental Conditions directly caused by Excluded Activities (and/or to pay Response Costs therefor) and to Correct Post-Closing Environmental Violations directly caused by Excluded Activities (and/or to pay Penalties therefor), in each case required by Orders in Material Compliance with such Orders, which Post-Closing Environmental Conditions or Post-Closing Environmental Violations are subject to a Formal Agency Action or an Order issued within * following the Excluded Activity and about which OCC Tacoma has received an Environmental Claim or Indemnity Notice within such * period; provided, however, notwithstanding any other provision of this Agreement, the maximum aggregate liability of OCC Tacoma and its Affiliates for Damages (including Remediation Damages, the cost of Remediation of Post-Closing Environmental Conditions and the cost of Correction of Post-Closing Environmental Violations) caused by Excluded Activities, shall be limited to the Excluded Activity Aggregate Limit, regardless of the actual Damages of such Excluded Activities, and Pioneer shall be responsible for any Damages (including Remediation Damages, the cost of Remediation of Post-Closing Environmental Conditions and the cost of Correction of Post-Closing Environmental Violations) in excess of the Excluded Activity Aggregate Limit. Amounts paid to or incurred by OCC Tacoma and its Affiliates to a PRP Group, or incurred by a PRP Group on behalf of OCC Tacoma or its Affiliates, * ARTICLE III ENVIRONMENTAL INDEMNITIES SECTION 3.1 INDEMNIFICATION BY OCC TACOMA FOR SPECIFIED ENVIRONMENTAL CONDITIONS, IDENTIFIED ENVIRONMENTAL CONDITIONS, IDENTIFIED ENVIRONMENTAL VIOLATIONS, COMMON LAW CLAIMS AND ENVIRONMENTAL CLAIMS. OCC Tacoma agrees to provide the following indemnification in relation to its obligations set forth in Article II above. (a) Indemnification by OCC Tacoma for Excluded Environmental Conditions. Subject to the terms of this Agreement, including Articles IV through VI hereof, OCC Tacoma shall indemnify, defend and hold the Pioneer Indemnified *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 18 23 Persons harmless, commencing upon OCC Tacoma's receipt of an Indemnity Notice from Pioneer, from and against all Damages, including Remediation Damages (subject to Section 3.2 below), incurred by Pioneer Indemnified Persons to perform necessary Remediation (and/or to pay Response Costs therefor) of each Excluded Environmental Condition pursuant to applicable Orders or applicable Formal Agency Actions and in Material Compliance therewith (which Remediation OCC Tacoma or its Affiliates have failed to perform or to pay the Response Costs therefor in accordance with Section 2.2 above), except to the extent that such Pioneer Indemnified Persons have liability or responsibility for such Excluded Environmental Condition pursuant to Subsection 2.2(b) above. The obligations of OCC Tacoma under this Section 3.1(a), if any, shall survive the Closing and continue in perpetuity, shall be personal to Pioneer Chlor Alkali Company, Inc. and its Affiliates, and shall not be assignable or transferable to any other Person. (b) Indemnification by OCC Tacoma for Specified Environmental Conditions. Subject to the terms of this Agreement, including Section 3.3 and Articles IV through VI hereof, OCC Tacoma shall indemnify, defend and hold Pioneer Indemnified Persons harmless, for the period commencing upon OCC Tacoma's receipt of an Indemnity Notice from Pioneer and expiring on the Applicable Sunset Date, from and against all Damages, including Remediation Damages (subject to Section 3.2 below), incurred by Pioneer Indemnified Persons to perform necessary Remediation (and/or to pay Response Costs therefor) of each Specified Environmental Condition pursuant to applicable Orders or applicable Formal Agency Actions and in Material Compliance therewith (which Remediation OCC Tacoma or its Affiliates have failed to perform or to pay Response Costs therefor in accordance with Section 2.3 above). * (c) Indemnification by OCC Tacoma for Identified Environmental Conditions and Identified Environmental Violations. Subject to the terms of this Agreement, including Sections 2.4 and 3.3 and Articles IV through VI hereof, OCC Tacoma shall indemnify, defend and hold Pioneer Indemnified Persons harmless, for the period commencing upon OCC Tacoma's receipt of an Indemnity Notice from Pioneer specifying an Identified Environmental Condition or Identified Environmental Violation and expiring on the Applicable Sunset Date for such Identified Environmental Condition or Identified Environmental Violation, from and against all Damages, including Remediation Damages (subject to Section 3.2 below), incurred by Pioneer Indemnified Persons, pursuant to applicable Orders or applicable Formal Agency Actions and in Material Compliance therewith, (i) to perform necessary Remediation (and/or to pay Response Costs therefor) of any Identified Environmental Condition, and/or (ii) to pay a Penalty assessed for, and/or to Correct, any Identified Environmental Violation (in each case which OCC Tacoma or its Affiliates have failed to Remediate, to Correct, or to pay Response Costs or Penalties therefor in accordance with Section 2.4 above). *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 19 24 (d) Indemnification by OCC Tacoma for Excluded Condition Common Law Claims, Specified Condition Common Law Claims, Identified Common Law Claims and Hylebos Area Common Law Claims. Subject to the other provisions of this Agreement, including Sections 2.4(b) and 3.3 and Articles IV through VI hereof, OCC Tacoma shall indemnify, defend and hold Pioneer Indemnified Persons harmless, for the period commencing upon OCC Tacoma's receipt of the Indemnity Notice from Pioneer and expiring upon the Applicable Sunset Date (except with respect to Excluded Condition Common Law Claims), from and against all Damages, including Remediation Damages (subject to Section 3.2 below), incurred by Pioneer Indemnified Persons pursuant to Excluded Condition Common Law Claims, Specified Condition Common Law Claims, Identified Common Law Claims and Hylebos Area Common Law Claims. (e) Indemnification by OCC Tacoma for Environmental Claims. Subject to the other provisions of this Agreement, including Section 3.3 and Articles IV through VI hereof, OCC Tacoma shall indemnify, defend and hold Pioneer Indemnified Persons harmless, for the period commencing upon OCC Tacoma's receipt of the Indemnity Notice from Pioneer specifying an Environmental Claim and expiring (except with respect to Excluded Environmental Conditions) upon the Applicable Sunset Date for such Environmental Claim, from and against all Damages, including Remediation Damages (subject to Section 3.2 below), incurred by Pioneer Indemnified Persons pursuant to * provided, however, (x) OCC Tacoma shall have no obligation under this clause (e) if such Environmental Claim is based solely upon or caused solely by (I) the activities of Pioneer, its Affiliates or Representatives, or (II) activities, operations, events or occurrences on the Site after the Closing, other than Excluded Activities or Treatment System Operation (other than Improper Treatment System Operation), in which case * , and (y) OCC Tacoma's obligation of indemnification and defense shall be shared and apportioned with Pioneer pursuant to Section 4.2(h) and the Parties' respective indemnification obligations under this Article III to the extent that * . (f) Indemnification by OCC Tacoma for Excluded Activities. Subject to the other provisions of this Agreement (other than Section 4.8(a)), OCC Tacoma shall indemnify, defend and hold Pioneer Indemnified Persons harmless, commencing upon OCC Tacoma's receipt of an Environmental Claim or an Indemnity Notice specifying an Environmental Claim for Remediation of (and/or payment of Response Costs for) a Post-Closing Environmental Condition or to perform Correction of (and/or payment of Penalties for) a Post-Closing Environmental Violation, in either case directly caused by an Excluded Activity, from and against all Damages incurred in response to such Environmental Claim or Indemnity Notice, including Remediation Damages (subject to Section 3.2 below); provided that * provided, however, *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 20 25 notwithstanding any other provision of this Agreement to the contrary, (i) Pioneer Indemnified Persons shall in no event be entitled to recover, in the aggregate, Damages with respect to Excluded Activities, including Remediation Damages, to the extent such Damages cause OCC Tacoma Indemnified Persons to incur aggregate liability for Excluded Activities, Post-Closing Environmental Conditions, Post-Closing Environmental Violations and Remediation Damages in excess of the Excluded Activity Aggregate Limit, and (ii) the maximum aggregate liability of OCC Tacoma Indemnified Persons for Damages, Excluded Activities, Post-Closing Environmental Conditions, Post-Closing Environmental Violations and Remediation Damages, shall be the Excluded Activity Aggregate Limit. SECTION 3.2 INDEMNIFICATION BY OCC TACOMA FOR REMEDIATION DAMAGES. Subject to the other provisions of this Agreement, including Articles IV through VI (other than Section 4.8(a)) hereof, OCC Tacoma shall indemnify, defend and hold Pioneer harmless from and against all Remediation Damages incurred by Pioneer for the period commencing at the Closing and expiring on the Applicable Sunset Date; provided, however, notwithstanding any other provision of this Agreement, Pioneer Indemnified Persons shall not be entitled to recover, in the aggregate, Remediation Damages in excess of the Excluded Activity Aggregate Limit, and the maximum aggregate liability of OCC Tacoma and its Affiliates with respect to Excluded Activities, including Remediation Damages, shall be the Excluded Activity Aggregate Limit. Pursuant to this Section 3.2, OCC Tacoma shall provide In-Kind Product Replacement unless such Products are not available to OCC Tacoma or its Affiliates from their production of such Products after supplying their own internal needs for such Products. * Pioneer shall execute a written acknowledgment of payment and resolution of Remediation Damages with respect to such Remediation Event. * This Section 3.2 shall be the sole and exclusive remedy for Remediation Damages under this Agreement in accordance with Section 4.5 below, notwithstanding any other provision of this Agreement, and disputes regarding the amount, scope or basis of Remediation Damages shall be subject to dispute resolution pursuant to Article VI. The rights of Pioneer Chlor Alkali Company, Inc. and its Affiliates under this Section 3.2 shall not be assignable or transferrable to any other Person, except to the extent expressly permitted under Section 7.10 herein. Absent such a permitted assignment, the obligations of OCC Tacoma under this Section 3.2, if any, shall be personal to Pioneer Chlor Alkali Company, Inc. and its Affiliates. SECTION 3.3 INDEMNIFICATION BY PIONEER FOR SPECIFIED ENVIRONMENTAL CONDITIONS, IDENTIFIED ENVIRONMENTAL CONDITIONS, IDENTIFIED ENVIRONMENTAL VIOLATIONS, ENVIRONMENTAL CLAIMS OR OTHER ENVIRONMENTAL MATTERS. Subject to the terms of this Agreement, including Sections 3.1 and 3.2 and Articles IV through VI, Pioneer agrees to provide the following indemnification in relation to its obligations set forth in Article II above. *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 21 26 (a) Indemnification by Pioneer for Specified Environmental Conditions and Specified Condition Common Law Claims Arising Therefrom. Pioneer shall indemnify, defend and hold OCC Tacoma Indemnified Persons harmless from and against all Damages arising from, or related to, each Specified Environmental Condition and each Specified Condition Common Law Claim * , as follows: (i) prior to the Applicable Sunset Date and subject to Section 2.5(e), in the event that Pioneer Indemnified Persons, or activities, operations, events or occurrences on the Site after the Closing, other than Excluded Activities or Treatment System Operation (other than Improper Treatment System Operation), either (1) Release Hazardous Materials or other substances or materials that mix or commingle with a Specified Environmental Condition, or (2) otherwise directly cause an increase in the cost or scope of the Remediation of a Specified Environmental Condition, Pioneer shall, subject to the terms of Article IV below (including Section 4.8), indemnify, defend and hold OCC Tacoma Indemnified Persons harmless from and against all Damages to the extent incurred by OCC Tacoma to perform necessary Remediation pursuant to applicable Orders or applicable Formal Agency Actions and in Material Compliance therewith, to pay such increased cost or scope of Remediation, or pursuant to any Specified Condition Common Law Claims * ; and (ii) from and after the Applicable Sunset Date for each Specified Environmental Condition and each Specified Condition Common Law Claim arising therefrom, Pioneer shall, subject to the terms of Article IV below except Section 4.8, indemnify, defend and hold OCC Tacoma Indemnified Persons harmless from and against all Damages arising from, or related to, such Specified Environmental Condition or any Specified Condition Common Law Claim * . (b) Indemnification by Pioneer for Identified Environmental Conditions and Identified Environmental Violations, and Identified Common Law Claims Arising Therefrom. Pioneer shall indemnify, defend and hold OCC Tacoma Indemnified Persons harmless from and against all Damages arising from, or related to, Identified Environmental Conditions or Identified Environmental Violations, and from Identified Common Law Claims * , as follows: (i) prior to the Applicable Sunset Date, in the event that Pioneer Indemnified Persons, or activities, operations, events or occurrences on the Site after the Closing other than Excluded Activities or Treatment System Operation (other than Improper Treatment System Operation) Release Hazardous Materials that mix or commingle with, an Identified Environmental Condition, or otherwise increase the cost or scope of the Remediation of an Identified Environmental Condition, the amount of Natural Resource Damages awarded under CERCLA, or the Correction of any Identified Environmental Violation, or for any Identified Common Law Claim * , Pioneer shall, subject to the terms of Article IV below (including Section 4.8), indemnify, defend and hold OCC Tacoma Indemnified Persons harmless from and against all Damages incurred by OCC Tacoma Indemnified Persons to perform necessary Remediation pursuant to applicable Orders or applicable *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 22 27 Formal Agency Actions in Material Compliance therewith subject to Section 2.5(e), to pay such contribution or increased cost thereof subject to Section 2.5(e), or pursuant to any Identified Common Law Claim * ; and (ii) from and after the Applicable Sunset Date for the Identified Environmental Condition or the Identified Environmental Violation, Pioneer shall, subject to the terms of Article IV below except Section 4.8, indemnify, defend and hold OCC Tacoma Indemnified Persons harmless from and against all Damages arising from such Identified Environmental Condition or Identified Environmental Violation or any Identified Common Law Claim * . (c) Indemnification by Pioneer for Environmental Matters Generally. Subject to the other provisions of this Agreement, including clauses (a) and (b) of this Section 3.3, and without regard to Section 4.8 below, Pioneer shall release, indemnify, defend and hold OCC Tacoma Indemnified Persons harmless from and against all Damages arising from Environmental Matters, whether known or unknown, absolute, accrued, contingent, fixed or otherwise, except * . (d) Indemnification by Pioneer for Excluded Activities. Once the Excluded Activity Aggregate Limit has been reached, Pioneer shall indemnify, defend and hold OCC Tacoma Indemnified Persons harmless from and against all Damages, including Remediation Damages, that are subject to the Excluded Activity Aggregate Limit. * (e) Indemnification by Pioneer for Post-Closing Environmental Violations and Post-Closing Environmental Conditions. Pioneer shall indemnify, defend and hold OCC Tacoma Indemnified Persons harmless from and against all Damages incurred by OCC Tacoma Indemnified Persons arising from or related to any Post-Closing Environmental Violation or Post-Closing Environmental Condition including any Environmental Claim arising from or related to a Post- Closing Environmental Violation, except * . SECTION 3.4 OTHER INDEMNIFICATION. Subject to the terms of this Agreement, including Articles IV through VI, each Party agrees that, if and to the extent that it breaches its obligations pursuant to Sections 2.5, 2.6, 2.7, 2.8 and 2.9, that Party shall indemnify, defend and hold harmless the other Party and the other Party's Indemnified Persons against Damages for Remediation of Environmental Conditions and/or payment of Response Costs therefor and for Correction of Environmental Violations and/or payment of Penalties therefor as expressly set forth in Sections 2.5, 2.6, 2.7, 2.8 and 2.9, in accordance with the terms and limitations of those sections. SECTION 3.5 TERMINATION OF PIONEER'S RESPONSIBILITIES AND OBLIGATIONS UNDER ARTICLE III. Pioneer's responsibility under this Article III shall terminate on * , at which time Pioneer's obligations under Article III shall cease automatically and *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 23 28 be of no further force and effect; provided, however, that to the extent that Pioneer or any of its Affiliates has not (A) made all payments to OCC Tacoma Indemnified Persons then due and payable and not in dispute pursuant to any pending Indemnity Claim accepted by Pioneer, if any, (B) made all payments to OCC Tacoma Indemnified Persons subsequently determined in dispute resolution or litigation to have been due and payable pursuant to any pending Indemnity Claim in dispute on such termination date, or (C) satisfied the obligation of Pioneer to substitute itself for OCC Tacoma and its Affiliates for the matters set forth in Sections 2.3(c) and 2.4(c), the termination of Pioneer's obligations under this Article III shall not occur until all such payments have been made and such obligation has been fully satisfied; and, provided, further, that the rights of Pioneer under this Section 3.5 shall be personal to Pioneer Chlor Alkali Company, Inc. and its Affiliates and shall not be assignable or transferrable to any other Person, notwithstanding any other provision of this Agreement. ARTICLE IV CLAIM AND INDEMNITY PROCEDURES SECTION 4.1 NOTICE OF ENVIRONMENTAL AND COMMON LAW CLAIMS AND ORDERS. Within thirty (30) days of receipt of a written Underlying Claim, the Party receiving such Underlying Claim shall provide a Claim Notice or an Order Notice to the other Party, enclosing documentation of such Underlying Claim, and stating whether such Claim Notice or Order Notice is intended by such Party to constitute (in conjunction with other information required in Section 4.2(a) below) an Indemnity Claim. Upon receipt of a Claim Notice or Order Notice which is not identified as an Indemnity Claim, the Party receiving such Notice may choose, in its reasonable discretion, to accept such notice as an Indemnity Notice and assume the defense against such Underlying Claim as set forth in Section 4.2 below by delivering written notice to the Indemnified Person within thirty (30) days of receipt. *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 24 29 SECTION 4.2 INDEMNIFICATION PROCEDURES. (a) Notice of Indemnity Claim. Within thirty (30) days after an Indemnified Person receives written notice of an Underlying Claim that constitutes an Indemnity Claim under this Agreement, the Indemnified Person (and/or Pioneer or OCC Tacoma, as applicable) shall, if an Indemnity Claim is to be made pursuant to this Agreement, provide an Indemnity Notice in writing to the Indemnifying Party. The Indemnified Person shall supplement such Indemnity Notice as reasonably requested in writing by the Indemnifying Party. The Indemnity Notice shall set forth the Indemnified Person or Persons, an explanation of the basis of the Indemnity Claim, the Section of this Agreement under which defense and indemnification is sought, the amount, to the extent known or estimated, of such Indemnity Claim sought by the Indemnified Person, a list identifying, to the extent known or estimated, each separate item and amount of Damages and each separate Underlying Claim, and the Claim Notice or Order Notice on which such Indemnity Claim is based. Failure of an Indemnified Person (and/or Pioneer or OCC Tacoma, as applicable) to provide a proper Indemnity Notice pursuant to this Section 4.2, and a Claim Notice or Order Notice pursuant to Section 4.1, to the Indemnifying Party within the required thirty (30)-day period shall relieve such Indemnifying Party from any liability or obligation which it may have under this Agreement either (i) to the extent, but only to the extent, of any material detriment suffered by the Indemnifying Party as a result of such failure, or (ii) if the Claim Notice or Order Notice with respect to an Underlying Claim issued between the Closing and the Early Sunset Date has not been provided to the Indemnifying Party within ninety (90) days following the occurrence of an Early Sunset Date as provided in this Agreement. (b) Response to Indemnity Claim. The Indemnifying Party shall respond in writing to the Indemnified Person (and to Pioneer or OCC Tacoma, as applicable) within thirty (30) days of receipt of the Indemnity Notice. The Indemnifying Party shall respond in one of the following ways: (i) accept the Indemnity Claim for defense and indemnification without reservation of rights, either immediately or upon the Indemnified Person's incurring Damages exceeding the threshold amount under Section 4.8, if applicable, (ii) accept the defense of the Underlying Claim, subject to reservation of rights upon further factual determination during the defense and resolution of such Claim as described in subsection (c) below and subject to dispute resolution, (iii) elect to perform factual investigation of the Indemnity Claim for a period of six (6) months or such other period as agreed by the Indemnifying Party and the Indemnified Person (and/or Pioneer or OCC Tacoma, as applicable) to determine whether the Indemnity Claim is valid, (iv) request clarification or further information regarding the Indemnity Claim from the Indemnified Person (and/or Pioneer or OCC Tacoma, as applicable), or (v) reject the Indemnity Claim. *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 25 30 (c) Defense of the Underlying Claim. If the Indemnifying Party accepts the defense of the Indemnity Claim either in the initial response to the Indemnity Claim pursuant to clauses (i) or (ii) above, or following further investigation or clarification pursuant to clauses (iii) or (iv) above, the Indemnifying Party may in its sole discretion either (1) undertake the defense against the Underlying Claim by Representatives chosen by it which are reasonably acceptable to the Indemnified Person or (2) reimburse the Indemnified Person for its defense against the Underlying Claim, using Representatives chosen by the Indemnified Person which are reasonably acceptable to the Indemnifying Party. The Person undertaking the defense (the Indemnifying Party on the one hand, or the Indemnified Person on the other hand) shall keep the other Person or Party reasonably informed of the defense against or settlement or disposition of an Underlying Claim. The Indemnifying Party and the Indemnified Person shall consult with each other, to the extent either reasonably requests, with respect to the defense against or settlement or disposition of an Underlying Claim, and shall cooperate in such defense. The Indemnified Person shall make, at its sole cost and expense except for reasonable reproduction charges, records and Representatives reasonably available to the Indemnifying Party for use in defending against or disposing of or settling an Underlying Claim, and shall take those reasonably diligent actions within its power which are necessary to preserve legal defenses to such Underlying Claim. (d) Failure to Defend. If the Indemnifying Party rejects an Indemnity Claim or, within thirty (30) days after notice of an Indemnity Claim, fails to undertake, or to agree to reimburse the cost of, the defense against an Underlying Claim, the Indemnified Person shall have the right to undertake the defense against the Underlying Claim with Representatives chosen by it in its reasonable discretion; provided, however, that the Indemnifying Party shall thereafter have the right to assume the defense against the Underlying Claim if the Indemnifying Party responded to the Indemnity Notice pursuant to Section 4.2(b)(iii) or (iv). In the event that the Indemnity Claim is determined to be valid, the Damages of the Indemnified Person shall include its reasonable costs and expenses, including reasonable fees and expenses of attorneys, consultants and experts incurred in any such defense of such Claim. Notwithstanding the foregoing, the Indemnified Person shall have no right to settle or compromise any such Claim for which the Indemnified Person has sought or will seek indemnification from the Indemnifying Party without providing thirty (30) days' notice to, and without the prior written consent of, the Indemnifying Party, which consent shall not be unreasonably withheld or delayed; provided, however, that if any Governmental Authority's or Third Party's offer of settlement solely for money is proffered by the Indemnified Person to the Indemnifying Party and is not consented to by the Indemnifying Party, then the Indemnifying Party shall be deemed to have waived any rights it may otherwise have retained to contest the validity of any Damages awarded against the Indemnifying Party and/or Indemnified Person in favor *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 26 31 of such Governmental Authority or Third Party to the extent that the award in such judgment exceeds the offer of settlement. (e) Negotiation with Governmental Authorities. (i) In the event that a Governmental Authority initiates negotiations with Pioneer or Pioneer Indemnified Persons for an Administrative Order or Court Order or Formal Agency Action addressing any Excluded Environmental Condition, Specified Environmental Condition, Identified Environmental Condition, Identified Environmental Violation or Environmental Claim, for which indemnity is being or will be sought from OCC Tacoma, and provided that OCC Tacoma has neither failed to respond to an Indemnity Notice therefor pursuant to Subsection 4.2(b) above nor rejected such Indemnity Claim, Pioneer shall not, and shall cause its Indemnified Persons not to, engage in such negotiations or enter into or accede to an Administrative Order or Court Order or Formal Agency Action without providing notice to OCC Tacoma and, at OCC Tacoma's option, Pioneer and Pioneer Indemnified Persons must take all reasonable and practicable efforts to include OCC Tacoma in such negotiations. If OCC Tacoma is defending or participating in the defense of any Pioneer Indemnified Person pursuant to this Article IV with respect to such Order or Formal Agency Action, OCC Tacoma shall have no obligation to perform or pay for the actions required by the Order or Formal Agency Action, or voluntarily pursued by Pioneer Indemnified Persons, nor to pay any Damages of any Pioneer Indemnified Person relating to the Order or Formal Agency Action or such voluntary activities, unless OCC Tacoma has been provided a meaningful opportunity to participate in the negotiations. In addition, OCC Tacoma shall thereafter have the right to assume control of negotiations with Governmental Authorities if OCC Tacoma responded to the Indemnity Notice pursuant to Section 4.2(b)(iii) or (iv) and thereafter assumes the defense pursuant to Section 4.2(d). (ii) Conversely, in the event that a Governmental Authority initiates negotiations with OCC Tacoma Indemnified Persons for an Administrative Order or Court Order or Formal Agency Action addressing any Post-Closing Environmental Condition (except one directly caused by an Excluded Activity) or other Environmental Matter that does not constitute an Excluded Environmental Condition, Specified Environmental Condition, Identified Environmental Condition, Identified Environmental Violation or Environmental Claim in which a Governmental Authority or a Third Party seeks to impose or asserts a Formal Agency Action or an Order with respect to an Identified Environmental Condition or an Identified Environmental Violation, for which indemnity is or will be sought from Pioneer, and provided that Pioneer has neither failed to respond to an Indemnity Notice therefor pursuant to Subsection 4.2(b) above nor rejected such Indemnity Claim, OCC Tacoma shall not, and shall cause its Indemnified Persons not to, engage in such negotiations or enter into or accede to an Administrative Order or Court Order or a Formal Agency Action without providing notice to Pioneer and, at Pioneer's option, OCC Tacoma and OCC *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 27 32 Tacoma Indemnified Persons must take all reasonable and practicable efforts to include Pioneer in such negotiations. If Pioneer is defending or participating in the defense of any OCC Tacoma Indemnified Persons pursuant to this Article IV with respect to such Order or Formal Agency Action, Pioneer shall have no obligation to perform or pay for the actions required by the Order or Formal Agency Action, or voluntarily pursued by OCC Tacoma Indemnified Persons, nor to pay any Damages of any OCC Tacoma Indemnified Person relating to such Order or Formal Agency Action or such voluntary activities, unless Pioneer has been provided a meaningful opportunity to participate in the negotiations. In addition, Pioneer shall thereafter have the right to assume control of negotiations with Governmental Authorities if Pioneer responded to the Indemnity Notice pursuant to Section 4.2(b)(iii) or (iv) and thereafter assumes the defense pursuant to Section 4.2(d). (iii) Subject to Sections 4.2(d), 4.7 and 5.2 and subject to the Indemnifying Party's right to assume control of negotiations with Governmental Authorities if the Indemnifying Party responded to the Indemnity Notice pursuant to Section 4.2(b)(iii) or (iv) and thereafter assumes the defense pursuant to Section 4.2(d), in the event that the Indemnifying Party has failed to respond to an Indemnity Notice pursuant to Section 4.2(b) or has rejected an Indemnity Claim, the Indemnified Person may engage in negotiations with Governmental Authorities, enter into or accede to an Order or Formal Agency Action, and take such other steps as are reasonable and appropriate with respect thereto, after providing an initial notice to the Indemnifying Party regarding its intention to take such action and, at the Indemnifying Party's request, taking reasonable and practicable efforts to include the Indemnifying Party in such negotiations. (f) Settlement or Other Disposition of Underlying Claims. After consultation pursuant to Section 5.2 below, the Indemnifying Party shall have the sole right to compromise or settle or otherwise dispose of such Underlying Claim in any manner it deems appropriate without the Indemnified Person's consent, provided that (i) such settlement or disposition does not impose a material obligation on the Indemnified Person (except by virtue of the occurrence of an Applicable Sunset Date), and (ii) the Indemnifying Party is and will be fully capable of performing its obligations pursuant to such settlement or disposition. In the event that clause (i) or (ii) in the preceding sentence is not met with respect to a particular settlement or disposition of an Underlying Claim, the Indemnifying Party shall notify the Indemnified Person of the proposed settlement or disposition and obtain the Indemnified Person's consent, which shall not be unreasonably withheld or delayed; provided, however, that if any Governmental Authority's or Third Party's offer of settlement solely for money is proffered by the Indemnifying Party to the Indemnified Person and is not consented to by the Indemnified Person, then the Indemnified Person shall be deemed to have waived any rights it may otherwise have retained to contest the *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 28 33 validity of any Damages awarded in favor of such Governmental Authority or Third Party to the extent that the award in such judgment exceeds the offer of settlement. (g) Responsibility for and Reclassification of an Indemnity Claim. (i) If the Indemnifying Party accepts the defense and/or indemnification of an Indemnity Claim pursuant to Section 4.2, or deems a Claim Notice or an Order Notice to be an Indemnity Claim pursuant to Section 4.1, and such Indemnity Claim is subsequently determined by the Indemnifying Party, during the defense, adjudication, settlement or other disposition of the Underlying Claim, not to be subject to indemnification pursuant to this Agreement, the Indemnifying Party shall, within thirty (30) days of such determination notify the Indemnified Person and either Pioneer or OCC Tacoma, as applicable, in writing, accompanied by an explanation of the basis for such determination and all supporting documentation reasonably available. The Indemnified Person and/or Pioneer or OCC Tacoma, as applicable, shall assume the defense and/or indemnification of such Underlying Claim, with Representatives chosen by it, unless such Party or Person disputes such responsibility in writing within thirty (30) days of receipt of such notice. Rejection of responsibility shall be subject to dispute resolution. (ii) Either the Indemnified Person or Pioneer or OCC Tacoma, as applicable, may request reclassification of an Indemnity Claim between an Excluded Environmental Condition, a Specified Environmental Condition, an Identified Environmental Condition or a Post-Closing Environmental Condition (or with respect to an Excluded Condition Common Law Claim, a Specified Condition Common Law Claim or an Identified Common Law Claim) within thirty (30) days of the date such Indemnity Claim is determined by such Party to be subject to a different classification, subject to the procedures (including the right of the recipient of such notice to object, and dispute resolution) set forth above. Notwithstanding any other provision of this Article IV, no Indemnified Person (or Pioneer or OCC Tacoma, as applicable) shall be entitled to recover defense costs such Indemnified Person (or Pioneer or OCC Tacoma, as applicable) incurred prior to such a reclassification, unless such defense costs were incurred pursuant to a temporary allocation pursuant to subsection (h) below or were incurred subject to dispute resolution. (iii) A determination under the first sentence of clause (i) and (ii) above must be made by written notice * , unless the classification of such Underlying Claim is disputed, in which event the dispute shall be subject to dispute resolution under Article VI below. Prior to final resolution of a disputed classification, the Underlying Claim shall be presumed to be, for purposes of any monetary limitations set forth herein, subject to the dollar limitations of the classification alleged which has the lowest dollar limit, provided that upon such resolution any amounts that *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 29 34 otherwise would have been paid to the other Party at the classification so determined shall promptly be paid. (h) Cross Indemnification and Allocation. In the event that both Parties are Indemnifying Parties with respect to a particular Underlying Claim, either pursuant to sharing of responsibility pursuant to Section 2.5, 2.6, 2.7 or 2.8, insufficient information concerning the factual or legal basis of the Underlying Claim, or otherwise, the Parties shall cooperate in the defense against such Underlying Claim, and shall negotiate, using dispute resolution if necessary, to determine a temporary or final allocation of the defense and indemnification of such Underlying Claim. If the Parties and their respective Indemnified Persons are unable to reach an allocation, the Parties shall each be entitled to defend themselves with Representatives of their choice, pending resolution of the dispute. (i) Transition. With respect to those Specified Environmental Conditions, Identified Environmental Conditions, Identified Environmental Violations, Common Law Claims, or other Environmental Matters for which Pioneer is or may be liable as the result of the occurrence of an Applicable Sunset Date, OCC Tacoma and its Affiliates shall at a reasonable and appropriate time, * as applicable, (1) provide copies of all correspondence and other documentation related to such matter to Pioneer, and (2) provide Pioneer with notice of, and an opportunity to attend or observe and, subject to Sections 2.4(b)(i)(A)(1) and (2) or 5.10(c), to reasonably participate in, all meetings and communications with Governmental Authorities and Third Parties regarding such matter, subject to OCC Tacoma's control of such correspondence, documentation, meetings and communications. Pioneer shall be responsible for any additional Damages for Remediation of Environmental Conditions (and/or to pay Response Costs therefor), and Correction of Environmental Violations (and/or to pay Penalties therefor), subject to a Formal Agency Action or Order, and Common Law Claims or Environmental Claims, in each case which result from participation by Pioneer or its Affiliates or their Representatives in any meetings or communications with Governmental Authorities or Third Parties. (j) Notice Period Following Applicable Sunset Date or Other Termination. An Indemnity Notice that meets the terms of Sections 4.1 or 4.2 (including the thirty (30)-day notice provisions therein) is timely if submitted by the Indemnified Person within ninety (90) days following the occurrence of an Applicable Sunset Date or other termination of an Indemnifying Party's obligation to indemnify, defend or hold such Indemnified Person harmless, provided that the Underlying Claim was issued and the amount for which such indemnification and/or defense is sought was expended prior to the occurrence of such Applicable Sunset Date or other termination of the Indemnifying Party's obligation. The occurrence of an Applicable Sunset Date *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 30 35 or other termination of the Indemnifying Party's obligation shall not terminate any Indemnity Claim (or the Indemnifying Party's obligation with respect to the Underlying Claim on which such Indemnity Claim is based) which is subject to dispute resolution or litigation and pending on the date upon which the Applicable Sunset Date or other termination of the Indemnifying Party's obligation occurs, and any such termination shall not relieve the Indemnifying Party of any of its obligations subsequently determined in dispute resolution or litigation to have been due and payable at such time pursuant to such pending Indemnity Claim. SECTION 4.3 PAYMENT. (a) Reimbursement. Unless the Indemnifying Party provides a defense pursuant to Section 4.2 above, the Indemnifying Party shall reimburse each Indemnified Person for all reasonable costs and expenses of defense (including reasonable fees of attorneys, consultants and experts) for which the Indemnified Person is entitled to be indemnified hereunder within thirty (30) days of the date such Indemnifying Party receives written notice of an invoice from such Indemnified Person. The Indemnifying Party shall pay any claims for indemnification under this Article IV (other than costs and expenses of defense costs as set forth in the preceding sentence) within the later of (i) sixty (60) days after its receipt of a proper notice of such Indemnity Claim under Section 4.2 or (ii) any later date on which the Indemnified Person is obligated to pay a Governmental Authority or Third Party pursuant to the Underlying Claim; provided, however, that if, within such sixty (60)-day period, the Indemnifying Party notifies the Indemnified Person of a good faith objection to such payment, accompanied by an explanation of the basis for such objection and supporting documentation then available, then payment shall be made promptly after such time, if ever, as it is finally determined that such Indemnity Claim is entitled to indemnification hereunder, and the extent or amount subject to indemnity hereunder (together with interest, if applicable, as provided in subsection (b) below). (b) Attorneys' Fees and Interest. If an Indemnifying Party is determined by a final and non-appealable judgment of a court of competent jurisdiction to have breached its obligation to indemnify an Indemnified Person hereunder, the Indemnified Person shall, subject to Section 4.7 below, be entitled to receive from the Indemnifying Party, in addition to all other amounts due hereunder (including amounts due for costs and expenses of defense, if any, pursuant to Section 4.2(d)), (i) its court costs and reasonable fees of attorneys, consultants or experts in enforcing its Indemnity Claim against the Indemnifying Party, and (ii) interest on all amounts otherwise paid by the Indemnified Person in respect of such breach from the date of the breach at * percent * per annum (but not in excess of the maximum lawful rate permitted by applicable law). If an Indemnifying Party fails to pay an amount later determined to be due to an Indemnified Person through dispute resolution pursuant to Article VI herein, *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 31 36 then such Indemnifying Party shall also pay to the Indemnified Party interest on the amount due from the date such amount would have been payable but for the dispute at a rate of * percent * per annum (but not in excess of the maximum lawful rate). SECTION 4.4 * SECTION 4.5 EXCLUSIVE REMEDY FOR CLAIMS REGARDING ENVIRONMENTAL LAWS OR ENVIRONMENTAL MATTERS. The right of indemnification set forth in this Agreement shall be the sole and exclusive remedy of the Parties and the Indemnified Persons with respect to each other with respect to the inaccuracy of any representation or the breach of any warranty, covenant or agreement made by OCC Tacoma or Pioneer in this Agreement or arising in connection with or related in any way to the subject matter of this Agreement, including any Environmental Laws, Environmental Matters, and the CB/NT Site. Each Party hereby waives and relinquishes any other rights, remedies, causes of action or other claims in respect of any such inaccuracy or breach including equitable and common law rights and rights created by statute, which such Party or its Indemnified Persons would otherwise have for any such inaccuracy or breach or with respect to this Agreement or any liability or Damages arising from, or related to, the subject matter of this Agreement, including any liability arising from, or related to, Environmental Laws, Environmental Matters or the CB/NT Site; provided, however, that this Section 4.5 shall not affect the rights of any Party or its Affiliates under the Asset Purchase Agreement or any Related Agreement. SECTION 4.6 * SECTION 4.7 MITIGATION OF DAMAGES. Each Party shall take all such reasonable actions as may be necessary to mitigate Damages for which such Party claims or may claim defense or indemnification, or may be responsible, under Article II or III of this Agreement, including mitigation of Damages reasonably anticipated in connection with matters subject to the sole discretion or exclusive control of such Party hereunder. *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 32 37 SECTION 4.8 LIMITATIONS ON INDEMNIFICATION. (a) Except with respect to (i) the obligations set forth in Sections 2.6, 2.7, 3.2 and 3.3(c), and (ii) OCC Tacoma after the Applicable Sunset Date with respect to a particular Specified Environmental Condition, Identified Environmental Condition, Identified Environmental Violation or Excluded Activity, neither the OCC Tacoma Indemnified Persons, prior to the Applicable Sunset Date for a particular Environmental Condition or Environmental Violation, nor the Pioneer Indemnified Persons , shall be entitled to indemnification unless for any individual Indemnity Claim, the Damages incurred by the Indemnified Group is in an amount greater than * excluding Remediation Damages. Once the individual threshold has been reached with respect to any Indemnity Claim against OCC Tacoma or Pioneer, as applicable, by such Indemnified Group, such Indemnity Claim against such Indemnifying Party shall be entitled to full indemnification as provided pursuant to this Article IV. (b) In addition to the threshold set forth above, in no event shall Pioneer Indemnified Persons be entitled to recover, in the aggregate, Damages with respect to Excluded Activities, including Remediation Damages, in excess of the Excluded Activity Aggregate Limit, and the maximum aggregate liability of OCC Tacoma and its Affiliates with respect to Excluded Activities, including Remediation Damages, shall be the Excluded Activity Aggregate Limit. (c) * ARTICLE V SITE MANAGEMENT SECTION 5.1 DESIGNATION OF PROJECT MANAGERS. Each Party shall designate by notice to the other Party a Project Manager and an Alternate Project Manager. The respective Project Managers shall be responsible for coordination of (a) access to the Site pursuant to the Environmental Easement described in Section 5.7 below, (b) Remediation of Environmental Conditions, (c) Correction of Environmental Violations, (d) Repair, (e) Expansion, (f) sharing of Information regarding items (a) through (e) above, subject to establishing applicable privileges, defense and indemnification under Article III, and (g) other activities of the Parties, their respective Affiliates, or any of their respective Representatives at or in the vicinity of the Site pursuant to this Agreement. Each Party shall pay for the Employee Costs and all overhead of its designated Project Manager and Alternate Project Manager. *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 33 38 SECTION 5.2 CONSULTATION. The Project Managers shall consult by telephone or in person, not less than monthly, and more frequently as necessary, regarding the activities described in Section 5.1 above. Prior to performing any Remediation (other than an Unscheduled Remediation Event), Correction, Repair which involves scheduled power outages or subsurface disturbance. Expansion or other activities which may affect the performance of obligations or liabilities under this Agreement (in each case other than emergencies), the Project Manager for the Party proposing to perform such activities shall notify the Project Manager for the other Party, except in emergencies where such consultation shall occur as soon as practicable. The consultation in this Section 5.2 specifically requires the Party proposing the Remediation (other than an Unscheduled Remediation Event), Correction, Repair which involves scheduled power outages or subsurface disturbance (in each case other than emergencies), Expansion or other activities pursuant to the Agreement to (a) provide non-privileged work plans, maps, diagrams and schedules under which any such activities would be conducted (although such Party may provide privileged documents pursuant to the Joint Defense Agreement attached hereto as Exhibit 1) to the Project Manager for the other Party, (b) provide reasonable opportunity for the Project Manager of the other Party to review and comment on the planning documents and schedules, taking into account exigent circumstances and applicable Orders, and (c) attempt to mitigate in a reasonable manner any impacts on the activities or operations of the other Party; provided that the obligation to mitigate shall not require a Party to incur costs in excess of the amount such Party would reasonably anticipate to incur absent such mitigation, but shall require that such Party consider alternative activities of equal or lesser cost that may achieve a substantially similar result while causing less impact on the other Party; and provided further that the right of a Party to proceed with activities shall be determined by the provisions of Article II of this Agreement. Consultation under this Section 5.2 shall not constitute notice under this Agreement, which must be provided pursuant to Section 7.7. SECTION 5.3 PERIODIC REPORTING. Each Party (or its designated Affiliates) shall provide written notice to the other Party to keep the other Party and such other Party's Project Manager informed on a periodic basis, but not less than quarterly, and in response to reasonable written inquiries of such other Party, of the status of any Repair which involves scheduled power outages or subsurface disturbance or which is otherwise material, Expansion, Remediation of Excluded Environmental Conditions, Specified Environmental Conditions, Identified Environmental Conditions, Post-Closing Environmental Conditions, Correction of Identified Environmental Violations or Post-Closing Environmental Violations or the defense and/or indemnification of any Environmental Claims or Common Law Claims being conducted by the Party pursuant to this Agreement. Each Party shall provide notice within thirty (30) days after receipt of a Discharge, Approval Letter or other termination of an Environmental Claim or a *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 34 39 Common Law Claim, along with a copy thereof, and of any payment or commitment which causes the Aggregate OCC Tacoma Liability Limit, the Excluded Activity Aggregate Limit or the Physical Change Aggregate Limit to be reached. SECTION 5.4 QUARTERLY STATEMENTS OF CERTAIN COSTS AND DAMAGES BY OCC TACOMA. OCC Tacoma shall provide written notice to Pioneer (a) on a quarterly basis certifying and describing amounts spent pursuant to this Agreement which are applied toward the OCC Tacoma Aggregate Liability Limit, the Physical Change Aggregate Limit, the Excluded Activity Aggregate Limit or the applicable thresholds under Section 4.8 above, and providing supporting documentation, and (b) in the form of an invoice (not less than quarterly if any Indemnity Claim by OCC Tacoma Indemnified Persons is then pending) certifying and describing any Damages, Direct Costs or other amounts for which it (or any of its Indemnified Persons) seek reimbursement, defense and/or indemnification (including amounts below the applicable thresholds of Section 4.8 if such Indemnified Persons intend to seek defense and/or indemnification against the Underlying Claim) from Pioneer or its Affiliates, successors or permitted assigns pursuant to this Agreement, and providing supporting documentation. SECTION 5.5 STATEMENTS OF CERTAIN COSTS AND DAMAGES BY PIONEER. Pioneer shall provide written notice to OCC Tacoma (a) promptly upon being notified by OCC Tacoma or otherwise becoming aware of a Remediation Event, describing and quantifying, to the extent known, the Loss of Production and Documented Lost Profits claimed by Pioneer and directly caused by such Remediation Event, and providing confidential supporting documentation to the Pioneer Accountant (and to the Neutral Accountant, in the event of dispute resolution) and non-confidential supporting documentation to OCC Tacoma, and (b) in the form of an invoice (not less than quarterly if any Indemnity Claim by Pioneer Indemnified Persons is then pending) certifying and describing any Damages, Direct Costs or other amounts for which it (or any of its Indemnified Persons) seeks reimbursement, defense and/or indemnification (including amounts below the applicable thresholds of Section 4.8 if such Indemnified Persons intend to seek defense and/or indemnification against the Underlying Claim) from OCC Tacoma or its Affiliates, successors or permitted assigns pursuant to this Agreement, and providing supporting documentation. SECTION 5.6 RIGHT TO REVIEW. Pioneer may request that the OCC Tacoma Accountant review and certify the statements and invoices provided in Section 5.4, at Pioneer's sole cost and expense, and OCC Tacoma may request that the Pioneer Accountant review and certify the statements and invoices provided in Section 5.5, at OCC Tacoma's sole cost and expense; provided, however, in each case that the cost and expense of such review and certification shall be borne by the Party preparing the statement or invoice if the applicable accountant determines that the statement or invoice is in error by more than ten percent (10%) of the original amount so invoiced *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 35 40 in favor of such Party. Disagreements regarding the statements or invoices shall be subject to dispute resolution pursuant to Article VI. SECTION 5.7 ACCESS TO THE SITE. With no access fee or charge to OCC Tacoma or any of its Affiliates, including any Employee Cost of Pioneer for such access, but subject to the other provisions of this Agreement, Pioneer shall (i) grant OCC Tacoma and its Affiliates and their respective Representatives (and representatives of Governmental Authorities, as required or reasonably requested in accordance with applicable Orders or Formal Agency Actions) a right to enter and use, at the reasonable discretion of OCC Tacoma or its Affiliates, upon giving reasonable notice to Pioneer, those portions of the Site needed to perform any actions reasonably necessary or appropriate (provided that OCC Tacoma and its Affiliates shall reasonably attempt to minimize any disruption to Pioneer's operations of the Site and shall consult with Pioneer pursuant to Section 5.2 and shall not transport Hazardous Materials onto the Site for the purpose of permanent disposal on the Site, provided OCC Tacoma shall be permitted to transport Hazardous Materials on or across the Site, to treat, handle, process, store and use Hazardous Materials on the Site within the Remediation Areas for Remediation or Correction, and to discharge effluent or air emissions, or inject effluent, from Remediation or Correction, in each case in Material Compliance with applicable Orders) to Remediate Excluded, Specified or Identified Environmental Conditions or to Correct Identified Environmental Violations or to respond to Environmental Claims or Common Law Claims arising therefrom or related thereto, including arranging for utilities or Third Party services; (ii) provide OCC Tacoma and its Affiliates with access, during business hours and after reasonable notice, to Pioneer's books, records, property and Representatives related to OCC Tacoma's performance of the activities required by this Agreement, subject to the Joint Defense Agreement and Section 7.2 below; (iii) not require payment from OCC Tacoma or any of its Affiliates or their respective Representatives for entry, access to or use of the Site reasonably required for OCC Tacoma's performance of its obligations under this Agreement, except with respect to Remediation Damages set forth in Section 3.2 above; (iv) execute and comply with the Grant of Easement and Agreement set forth in Exhibit 2 attached hereto to implement the right of entry and access granted to OCC Tacoma and its Affiliates and their respective Representatives; and (v) allow OCC Tacoma to continue using the building designated as F-24 for storage of supplies and equipment associated with the groundwater treatment system, provided that such use of building F-24 by OCC Tacoma shall be at the sole risk of OCC Tacoma. SECTION 5.8 ACCESS TO NECESSARY SERVICES AND EQUIPMENT. As set forth in the Operating Services Agreement attached hereto as Exhibit 3, Pioneer shall provide OCC Tacoma (and its designated Affiliates), at Pioneer's Direct Cost (and subject to Section 4.7), with utilities, including, without limitation, surface water, potable water, compressed air, electrical power, steam and natural gas, and other existing Third Party *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 36 41 services used by or available to Pioneer and reasonably necessary or appropriate for the Remediation of Specified or Identified Environmental Conditions or the Correction of Identified Environmental Violations or to respond to Environmental Claims or Common Law Claims arising therefrom or related thereto, including access to and an easement or license to use the on- Site sanitary and/or storm sewer or other permitted conveyance system for the discharge of the treated effluent from the groundwater treatment system, and Pioneer shall use reasonably diligent efforts to maintain and renew such permits as necessary for OCC Tacoma (or its designated Affiliates) to continue such discharge of treated effluent until the Applicable Sunset Date; provided, however, that (i) OCC Tacoma shall pay the documented incremental portion of Pioneer's Direct Cost of such permits, utilities, and services directly attributable to OCC Tacoma's Remediation, and (ii) Pioneer shall not be required to provide any utilities or services under this Agreement to the extent that its performance is prevented by a Force Majeure event. SECTION 5.9 MOVING OF IMPROVEMENTS. OCC Tacoma or its designated Affiliates may, at their sole discretion and after reasonable notice to and consultation with Pioneer pursuant to Section 5.2, move, relocate, functionally replace, dismantle or destroy any Improvement at the Site * provided that OCC Tacoma (or its designated Affiliates) shall, subject to Section 4.7 and consultation pursuant to Section 5.2, (a) at the discretion of OCC Tacoma (or its designated Affiliates), either * and (b) pay Remediation Damages pursuant to Section 3.2 * . All actions by OCC Tacoma and Pioneer pursuant to this Section 5.9 with respect to a Scheduled Remediation Event shall be conducted pursuant to a plan prepared by OCC Tacoma or Pioneer, as applicable, in consultation with the other Party, and in such manner as to minimize interference with, and downtime of production operations at the Facility, to minimize interference with Remediation or Correction and to allow Material Compliance with applicable Orders, in each case consistent with due regard for maintaining safety and environmental protection. SECTION 5.10 EXACERBATION CLAUSE FOR * . With respect to Remediation of Excluded Environmental Conditions, Specified Environmental Conditions, Identified Environmental Conditions or Identified Environmental Violations associated with * , for which OCC Tacoma has undertaken indemnification of Pioneer, OCC Tacoma and Pioneer shall consult under Section 5.2 and mitigate damages under Section 4.7, and: (a) OCC Tacoma (and its designated Affiliates) shall operate in Material Compliance with applicable Orders and with the least stringent standards of Environmental Laws and, subject to applicable Orders, have exclusive control over the timing and scope of the Remediation of such Excluded, Specified or Identified *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 37 42 Environmental Condition and the Correction of such Identified Environmental Violation, including (i) the performance, in the sole discretion of OCC Tacoma or its designated Affiliates, of additional Remediation, other studies or investigation or other actions required by Environmental Law or reasonably necessary or appropriate to defend against or to resolve any Excluded, Specified or Identified Environmental Condition, Identified Environmental Violation, or any Environmental Claim or Common Law Claim arising therefrom, or related thereto, and (ii) the negotiation, in the sole discretion of OCC Tacoma or its designated Affiliates, of action levels or cleanup levels with Governmental Authorities applicable thereto. (b) Pioneer shall (i) prior to the Applicable Sunset Date, if any, for such matter, cooperate and not materially interfere with the Remediation of Excluded Environmental Conditions, Specified Environmental Conditions, Identified Environmental Conditions or Post-Closing Environmental Conditions directly caused by Excluded Activities (and/or the payment of Response Costs therefor) or the Correction of Identified Environmental Violations or Post-Closing Environmental Violations directly caused by Excluded Activities (and/or the payment of Penalties therefor), in each case by or on behalf of OCC Tacoma or its designated Affiliates, (ii) not cause or permit a use of all or a portion of * for other than a heavy industrial use, (iii) prior to the Applicable Sunset Date, if any, for such matter, operate * in Material Compliance with applicable Orders and the least stringent standards of Environmental Laws, and (iv) not voluntarily accelerate the timing or materially increase the cost of any obligations of OCC Tacoma or any of its Affiliates with respect to any such Excluded, Specified or Identified Environmental Condition or Identified Environmental Violation, and (v) prior to the Applicable Sunset Date, if any, for such matter and subject to Sections 4.2(d) and 4.2(e), not communicate with any Governmental Authority or Third Party regarding the Remediation of Excluded Environmental Conditions, Specified Environmental Conditions, Identified Environmental Conditions, or Post-Closing Environmental Conditions directly caused by Excluded Activities (and/or the payment of Response Costs therefor, the Correction of Identified Environmental Violations or Post-Closing Environmental Violations directly caused by Excluded Activities (and/or the payment of Penalties therefor), or the payment or mitigation of Natural Resource Damages without providing written notice in advance to OCC Tacoma and providing OCC Tacoma (or its designated Affiliates) an opportunity to participate in and to control such communication (except in emergencies where such notice shall be provided as soon as practicable). (c) Pioneer agrees that neither it nor its Affiliates or Representatives will (i) request or encourage the assertion of Remediation Claims, Penalty Claims or Common Law Claims that may result in an Administrative Order, Court Order, or Formal Agency Action regarding * , or (ii) request an investigation or inspection or Remediation of * provided, however, that this shall not restrict Pioneer's *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 38 43 ability to comply with applicable Environmental Laws or, after reasonable notice to OCC Tacoma and consultation with OCC Tacoma, to seek in good faith and in a manner consistent with Subsection (b) above, regulatory guidance necessary for Pioneer to comply with applicable Environmental Laws in a manner which does not divulge privileged and confidential Information; provided, further, that unless OCC Tacoma indicates in writing it does not wish to be apprised of communications with Governmental Authorities, OCC Tacoma shall be given an opportunity to participate in communications with, and sent copies of, all communications by or on behalf of Pioneer Indemnified Persons to or from Governmental Authorities regarding the * (except in emergencies where such notice shall be provided as soon as practicable). (d) Until the expiration of the Applicable Sunset Dates for Specified Environmental Conditions, Identified Environmental Conditions, Identified Environmental Violations and Identified Common Law Claims, Pioneer shall not engage in * , in either case except (A) with the consent of OCC Tacoma in OCC Tacoma's discretion, (B) as required by applicable Environmental Laws, permits under Environmental Laws, or Orders, (C) in accordance with changes to the Site described in Sections 2.6 and 2.7 above or (D) in an emergency, including conditions which present an immediate threat or imminent danger to the health or safety of employees or the public. To the extent that Pioneer engages in such voluntary action not allowed in the preceding sentence, Pioneer shall be solely responsible to perform, or to pay Response Costs of, any Remediation of any Identified Environmental Condition discovered thereby, or (subject to Section 2.6, 2.7 or 2.11) any increase in the costs related to actions in response to any Specified Environmental Condition or, subject to Section 2.6, 2.7 or 2.11 above, any increase in the costs related to actions in response to any previously Identified Environmental Condition. (e) Upon the Applicable Sunset Date for each Specified Condition or Identified Environmental Condition or such earlier date as the Parties agree, the covenants set forth in this Section 5.10 shall terminate with respect to * . SECTION 5.11 EXACERBATION CLAUSE FOR * . With respect to Remediation of Identified Environmental Conditions * . (a) Each Party understands and appreciates that its long-term mutual interests will be best served by a fair and equitable application of its obligations under this Agreement, including the mitigation of any costs or expenses that it may incur, share or impose hereunder. Neither Party shall, or shall permit any of its Affiliates to, take any action the effect of which would reasonably be expected to impose any additional material obligation on, or materially increase any obligation of, the other Party under this Agreement (except with respect to the occurrence of an Applicable *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 39 44 Sunset Date, the passage of time or the exercise of a Party's rights to dispute resolution). (b) By way of example, and not by way of limitation, the following actions shall be permitted under the previous sentence if they are performed in the ordinary course of business and are not specifically intended to increase the obligation or liability of the other Party under this Agreement: (i) any action required to comply with applicable Environmental Laws, permits issued under Environmental Laws, and Orders; (ii) any action required to be taken in emergencies, including conditions which represent an immediate threat or imminent danger to the health or safety of employees or the public; (iii) subject to Sections 2.6 and 2.7 hereof, any investigation directly resulting from Repair or Expansion and required by any Environmental Law or any report to any Governmental Authority directly resulting from Repair or Expansion required of any Party by applicable Environmental Laws, including reports of Releases or the presence of Hazardous Materials if such discovery is made in the ordinary course of such Repair or Expansion; or (iv) normal and customary periodic non-intrusive compliance audits conducted after the Closing in the ordinary course of business including the WSHA Star audit and ISO 14000 audit, which do not require collection of samples of surface or subsurface soil, sediment, surface water or groundwater; or (v) passage of the Applicable Sunset Date. (c) By way of example, and not by way of limitation, the following actions shall be prohibited by Section 5.11 if they are performed with the intent to increase the obligation or liability of the other Party under this Agreement: (i) Neither Party may voluntarily accelerate the timing of any action, liability, or obligation hereunder (except with respect to the occurrence of an Applicable Sunset Date or the passage of time); and (ii) Neither Party may communicate with any Governmental Authority regarding the Remediation of a particular Specified or Identified Environmental Condition, the payment or mitigation of Natural Resource Damages or the Correction of a particular Identified Environmental Violation, in each case with respect to areas other than Remediation Areas, for which the other Party does or may *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 40 45 have responsibility (except with respect to the occurrence of an Applicable Sunset Date or the passage of time) under this Agreement without providing written notice in advance to the other and providing an opportunity to participate in such communication (except in emergencies where such notice shall be provided as soon as practicable). (iii) Neither Party may request or encourage the assertion of Environmental Claims or Common Law Claims that may result in an Administrative Order, Court Order, or a Formal Agency Action regarding the Site or the CB/NT Site, or other liabilities affecting the other Party without providing written notice in advance to the other and providing an opportunity to participate in such communication (except in emergencies where such notice shall be provided as soon as practicable). ARTICLE VI DISPUTE RESOLUTION SECTION 6.1 DISPUTE RESOLUTION. The Parties understand and appreciate that their long term mutual interests will be best served by effecting a rapid and fair resolution of any claims or disputes which may arise out of this Agreement or from any dispute concerning the terms of this Agreement. Therefore, each Party agrees to use reasonable efforts to resolve all such disputes as rapidly as possible on a fair and equitable basis. Toward this end each Party agrees to follow the procedures of this Article VI for presenting, promptly assessing and, if possible, settling claims and other disputes on a fair and equitable basis without litigation. Except as specifically set forth elsewhere in this Agreement, if a dispute arises regarding an Environmental Matter, the procedures of this section shall apply. SECTION 6.2 INFORMAL DISPUTE RESOLUTION. The Parties shall make reasonable efforts to resolve informally all disputes between the designated Project Managers within thirty (30) days after a dispute arises between the Parties. Prior to any Party's issuance of a written statement of dispute for formal dispute resolution as set forth in Section 6.3 below, the disputing Party shall notify the other Party of the commencement of informal dispute resolution. During informal dispute resolution, the Project Managers are required to meet, exchange non-privileged information (or, subject to the Joint Defense Agreement and at each Party's discretion, privileged or confidential information) and to attempt to resolve the dispute using reasonable efforts within thirty (30) days after the commencement of informal dispute resolution (or such shorter period as provided in the last sentence of this Section). If resolution cannot be achieved informally after thirty (30) days, either Party may notify the other that the informal process is terminated and, at that time, either Party may invoke the formal dispute resolution procedures of this Article VI to resolve the dispute. In the event that *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 41 46 exigent circumstances require a more immediate resolution of the dispute, the Party claiming the existence of such circumstances may terminate informal dispute resolution no less than ten (10) days after the commencement of informal dispute resolution. SECTION 6.3 FORMAL DISPUTE RESOLUTION. The Parties shall establish a DRP which shall serve as a forum for resolution of disputes for which agreement cannot be reached by the Project Managers through informal dispute resolution. (a) Appointment of Dispute Resolution Panel. The Parties shall each designate one individual and an alternate to serve on the DRP. The individuals designated to serve on the DRP shall be executives at the level of vice-president or higher in each Party's respective organization and these individuals shall be delegated the authority by the Party to participate on the DRP for the purposes of resolving disputes under this Agreement. (b) Statement of Dispute. Within thirty (30) days after the termination of informal dispute resolution, or within ten (10) days after such termination in the event of exigent circumstances, the disputing Party shall submit to the DRP a written statement of dispute setting forth the nature of the dispute, the disputing Party's position, and all facts, including documents that support the disputing Party's contentions. The statement of dispute may include any technical, legal or factual information the disputing Party is relying upon to support its position. This statement of dispute shall be provided to the other Party who, at its discretion, may provide within ten (10) days thereafter any additional information in response to the statement of dispute. (c) DRP Decision. Following elevation of a dispute to the DRP, the DRP shall have thirty (30) days to resolve the dispute after the receipt by the DRP of the information described in Section 6.3(b). The DRP members shall, as appropriate, meet and confer, by telephone or in person, and use reasonable efforts to resolve the dispute. Within ten (10) days of resolution of a dispute pursuant to the procedures specified in this section, the DRP decision shall be incorporated into the appropriate plan, schedule or procedures. While dispute resolution is in progress, work affected by the dispute, to the extent feasible, will be discontinued. If the DRP does not resolve the dispute within thirty (30) days, the dispute shall be referred to mediation, unless the DRP members agree that such mediation would not assist in resolving the dispute. (d) Neutral Accountant. If a dispute arises regarding review or certification of statements or invoices pursuant to Article V, which dispute is not resolved by informal dispute resolution or the DRP, the Parties shall submit the dispute to a Neutral Accountant selected by the Pioneer Accountant and the OCC Tacoma Accountant prior to the mediation procedure described in clause (e) below. The *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 42 47 Neutral Accountant shall review the supporting documentation (including confidential documentation) of the Party preparing the statement or invoice in dispute and shall have reasonable access to such Party's Representatives, books and records. The fees of the Neutral Accountant shall be paid by the Party preparing such statement or invoice if the Neutral Accountant determines that such statement or invoice was in error in the favor of such Party by ten percent (10%) or more of the original invoiced amount. Otherwise, the costs of the Neutral Accountant shall be shared equally between Pioneer and OCC Tacoma. (e) Mediation. If a dispute is not resolved in accordance with the procedures of clause (c) above, the members of the DRP shall engage the services of a mediator to assist in the resolution of the dispute. The mediator shall be selected by the DRP and shall be acceptable to both Parties. Thereafter, the DRP in consultation with the mediator shall establish further procedures whereby the Parties will meet, provide information and seek to resolve the dispute. Each party shall bear an equal portion of the costs of mediation including the mediator's fee and administrative costs. Following mediation, unless the parties agree otherwise, formal dispute resolution is terminated. Discussions and proceedings in informal and formal dispute resolution and before the mediator shall be privileged settlement communications and shall not be either subject to discovery or admissible in any proceeding, suit or legal action. (f) Failure of Dispute Resolution. If the dispute is not resolved through the dispute resolution process outlined in this section, either Party (or their respective Indemnified Persons, as the case may be) may commence a proceeding, suit or legal action in Court against the other Party to enforce the terms of this Agreement either (i) upon the termination of dispute resolution, or (ii) upon the occurrence of a dispute which threatens the ability of a Party to comply with applicable Orders, during such dispute resolution. SECTION 6.4 ATTORNEYS' FEES. The prevailing party in any proceeding, suit or legal action brought by any Party or Indemnified Person in Court against the other Party or such other Party's respective Affiliates or Representatives to enforce this Agreement shall be entitled to recover its reasonable attorneys' fees and expenses and Court costs, provided that each Party shall bear its own costs and expenses of informal and formal dispute resolution and mediation pursuant to Sections 6.2 and 6.3 above. SECTION 6.5 SERVICE OF PROCESS, CONSENT TO JURISDICTION, ETC. Each Party hereby irrevocably agrees that any legal action or proceeding against it arising out of this Agreement shall be brought in the courts of the State of Washington, or of the United States of America for the Western District of Washington, and does hereby irrevocably (a) designate, appoint and empower CT Corporation System on behalf of Pioneer and The Prentice-Hall Corporation System, Inc. on behalf of OCC Tacoma, *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 43 48 respectively, to receive for and on behalf of it service of process in the State of Washington, and (b) consent to service of process outside the territorial jurisdiction of such courts in the manner provided by law. In addition, each Party irrevocably waives (i) any objection which such Party may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of, or relating to, this Agreement brought in any such court, (ii) any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum, and (iii) the right to object, with respect to any such claim, suit, action or proceeding brought in any such court, that such court does not have jurisdiction over such Party or any other Party. ARTICLE VII MISCELLANEOUS SECTION 7.1 APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF WASHINGTON, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF. SECTION 7.2 CONFIDENTIALITY. Each Party shall, and shall cause its Affiliates and its and their Representatives to, hold in strict confidence, and not utilize for any commercial or other purpose whatsoever, Information; provided, however, that the foregoing obligation of confidence shall not apply to (a) any Information that is or shall become generally available to the public other than as a result of a disclosure by such Party, any of its Affiliates or the respective Representatives of such Party or any such Affiliate, (b) any Information that is or shall become available to such Party or its Representatives prior to the Closing on a non-confidential basis prior to its disclosure by such Party or its Representatives, and (c) any Information that shall be required to be disclosed by such Party, any of its Affiliates or the respective Representatives of such Party or any such Affiliate as a result of any offering of securities of such Party or of any such Affiliate or otherwise, in each case under any law or any rule or regulation of any stock exchange so long as such Party shall, and shall cause its Affiliates and their respective Representatives to, make reasonable efforts to preserve the confidentiality of such Information prior to disclosure, including providing notice to the other Party of the timing, form and content of such disclosure and providing reasonable assistance to the other Party in asserting the confidentiality of such Information. In this regard, Pioneer understands that certain commercial and financial Information contained in this Agreement and the Operating Services Agreement, and certain other Information provided to Pioneer pursuant to the Asset Purchase Agreement and Related Agreements, is considered by OCC Tacoma to be privileged *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 44 49 and/or confidential, and Pioneer agrees that it will request and use reasonable efforts to obtain confidential treatment of such Information in any offering of securities or public filing of Pioneer or any Affiliate of Pioneer or any related financing, if so requested by OCC Tacoma. (a) Confidentiality and Use of Shared Information. From time to time, the Parties may elect to disclose or transmit to each other, such Information as each Party or its Representatives deems appropriate for the sole and limited purpose of coordinating such activities that are necessary and proper to carry out the purposes of this Agreement. Shared Information may be disclosed to or transferred between the Parties orally or in writing or by any other appropriate means of communications. The Parties intend that no claim of privilege be waived by reason of such participation or cooperation under the terms of this Agreement. (i) Each Party agrees that all shared Information received from any other Party or its Representatives pursuant to this Agreement shall be held in strict confidence by the receiving Party and by all persons to whom such confidential Information is revealed by the receiving Party and that such Information shall be used only in connection with conducting such activities that are necessary and proper to carry out the purposes of this Agreement; (ii) Shared Information that is created and exchanged after the Closing in written or in document form and is intended to be kept confidential shall be marked "Confidential" or with a similar legend. If such Information becomes the subject of an administrative or judicial order requiring disclosure of such Information by a Party, where the Information will be unprotected by confidentiality obligations, the Party may satisfy its confidentiality obligations hereunder by notifying the Party that generated the Information and by giving such Party an opportunity to protect the confidentiality of the Information; (iii) Each Party shall take all necessary and appropriate measures to ensure that any person who is granted access to any shared Information or who participates in work or common projects or who otherwise assists any counsel or technical consultant in connection with this Agreement, is familiar with the terms of this Agreement and complies with such terms as they relate to the duties of such person; (iv) The Parties intend by this Section to protect from disclosure all Information and documents shared between the Parties or with any Representative to the greatest extent permitted by law regardless of whether the sharing occurred before execution of this Agreement and regardless of whether the writing or document is marked "Confidential." *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 45 50 (b) Joint Defense Agreement. The Parties will execute the Joint Defense Agreement attached as Exhibit 1 hereto to preserve privileges which apply to Information that is shared between the Parties and their respective Affiliates and Representatives for the purposes of defending against Environmental Claims or Common Law Claims. (c) Information Supplied by Pioneer to the Neutral Accountant. A Neutral Accountant which receives confidential business information from Pioneer regarding claims of, and documentation supporting, Average Freight Cost, Average Price, Average Production Cost, Loss of Production, Documented Lost Profits or In-Kind Consideration as confidential elements of Remediation Damages is authorized to provide a statement to OCC Tacoma certifying the Loss of Production, Documented Lost Profits or In-Kind Consideration, but shall hold in strict confidence and not to disclose to OCC Tacoma or its Affiliates or to any Third Party the Average Freight Cost, Average Price and Average Production Cost of Pioneer. (d) Return of Information Upon Failure to Close. In the event that the Closing shall not occur, each Party will return to the other Party, or destroy, as much of the Information which shall be in the possession of such Party as such other Party shall request. SECTION 7.3 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. The Parties shall not, and shall not permit any of their respective Affiliates to, issue any press release or other public announcement relating to the subject matter of this Agreement (other than presentations to security analysts and financial institutions) except (a) upon obtaining the prior consent of the other Party, which consent shall not be unreasonably withheld or delayed, and (b) when, on the advice of legal counsel, such release or announcement is required by the federal securities laws or the rules and regulations of any of the national stock exchanges (in which case the disclosing Party shall to the extent practicable consult with the other Party prior to making the disclosure); provided that the disclosing Party shall first provide a draft to the other Party and allow that Party a reasonable opportunity to review and comment on the press release and to correct any aspect of the press release that pertains to that Party or its rights or obligations under this Agreement. Each Party will consult with the other Party concerning the means by which the Representatives of OCC Tacoma or Pioneer and Governmental Authorities asserting jurisdiction over the Site will be informed of the transactions contemplated by this Agreement. Except as set forth in Sections 2.4(b)(i)(A)(2), 5.2, 5.10(b)(v), 5.10(c), and 5.11(c)(ii), nothing in this Agreement shall limit either Party's right to respond to inquiries from the press or the public regarding Environmental Conditions or Environmental Violations. *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 46 51 SECTION 7.4 NO THIRD-PARTY BENEFICIARIES. NOTHING CONTAINED IN THIS AGREEMENT, EXPRESS OR IMPLIED, IS INTENDED TO CONFER OR SHALL BE DEEMED TO CREATE ANY RIGHT OR REMEDY IN ANY PERSON (OTHER THAN THE PARTIES, THEIR RESPECTIVE SUCCESSORS AND PERMITTED ASSIGNS, THE OCC TACOMA INDEMNIFIED PERSONS AND THE PIONEER INDEMNIFIED PERSONS), AND THIS AGREEMENT SHALL NOT BE CONSTRUED IN ANY RESPECT TO BE A CONTRACT IN WHOLE OR IN PART FOR THE BENEFIT OF ANY THIRD PARTY (OTHER THAN THE PERSONS HEREINBEFORE STATED). SECTION 7.5 ENTIRE AGREEMENT. This Agreement (including the documents attached hereto) constitutes the entire agreement among the Parties and supersedes all prior understandings and agreements with respect to the subject matter hereof. SECTION 7.6 EXPENSES. Except as otherwise provided herein or therein, each of the Parties will bear all of its own costs and expenses (including the fees and expenses of legal counsel, accountants and other advisors) incurred in connection with this Agreement (or the enforcement of this Agreement), the Joint Defense Agreement, the Grant of Easement and Agreement, the Operating Services Agreement, and the transactions contemplated hereby or thereby. SECTION 7.7 NOTICES. All notices and other communications under this Agreement shall be in writing and sent by (a) personal delivery (including courier service), (b) telecopier to the number indicated below, or (c) first class or registered or certified mail, postage prepaid and addressed as follows (or to such other addresses and telecopier numbers as any Party may designate by notice to the other Parties), any such notice or communication being deemed given upon receipt: IF TO OCC TACOMA, AT: OCC Tacoma, Inc. 5005 LBJ Freeway Dallas, Texas 75244 Attention: Chief Financial Officer Telecopier No.: (972) 404-3956; *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 47 52 WITH A COPY TO: Occidental Chemical Corporation 5005 LBJ Freeway Dallas, Texas 75244 Attention: General Counsel Telecopier No.: (972) 404-3957; WITH A COPY TO: OCC Tacoma Project Manager IF TO PIONEER, AT: Pioneer Companies, Inc. 700 Louisiana, Suite 4200 Houston, Texas 77002 Attention: Kent R. Stephenson, Esq. Telecopier No.: (713) 225-4426; WITH A COPY TO: Jackson Walker, L.L.P. 1100 Louisiana, Suite 4200 Houston, Texas 77002 Attention: Tracey Smith Lindeen, Esq. Telecopier No.: (713) 752-4221. WITH A COPY TO: Pioneer Project Manager SECTION 7.8 AMENDMENTS AND WAIVERS. No amendment of any provision of this Agreement shall be valid unless the same shall be set forth in an instrument in writing signed by each Party. Each of the Parties may waive (a) any inaccuracies in the representations and warranties of any other Party contained in this Agreement or in any document, certificate or writing delivered pursuant hereto, or (b) compliance by *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 48 53 such other Party with any of the agreements of such Party or the fulfillment of any of the conditions to its own obligations set forth herein. Any agreement on the part of any Party to any such waiver shall be valid only if set forth in an instrument in writing signed by such Party. No waiver by any Party of any default, misrepresentation or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any such occurrence. Neither the failure nor any delay by any Party in exercising any right, power or privilege under this Agreement will operate as a waiver of such right, power or privilege, except as set forth in Article IV hereof and except with respect to the termination of OCC Tacoma's obligations upon the occurrence of the Applicable Sunset Dates herein and the termination of Pioneer's obligations pursuant to Sections 2.10 and 3.5, and no single or partial exercise of any such right, power or privilege will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. SECTION 7.9 ASSIGNMENT; SUCCESSORS AND ASSIGNS. Subject to Sections 2.1, 2.2(a), 3.1(a), 2.6, 2.7, 2.10, 3.2, 3.5 and 7.10 below, this Agreement shall be binding upon, and inure to the benefit of, the Parties and their respective successors and permitted assigns, but neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned, by operation of law or otherwise (other than as a result of any merger or consolidation), by any Party without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed; provided, that, notwithstanding the foregoing, and subject to the provisions of Section 7.10 below, (a) in connection with any sale of the Facility as a whole or the properties and assets of any Party substantially as an entirety to any Person, the Party making such sale may assign this Agreement, and its rights and obligations hereunder, to such Person, (b) any Party may assign this Agreement, or its rights hereunder, to any Affiliate of such Party (provided that immediately following such assignment, the test set forth in the last sentence of this Section 7.9 is satisfied), and (c) Pioneer shall have the right to assign as collateral its rights and obligations under this Agreement to any bank, financial institution or other lender (or any indenture trustee acting on behalf of any such person) that provides financing in connection with (x) the transactions contemplated by the Asset Purchase Agreement or any Related Agreement (including any renewal or rearrangement of such financing), and (y) working capital funding for operation of the Facility, and, provided further that, in the case of any assignment of this Agreement, (i) prior to such assignment (or, in the case of a bank, financial institution or lender, prior to exercising remedies hereunder or foreclosing the collateral assignment) the Person to which such assignment is made shall expressly assume, by an instrument in writing reasonably satisfactory to OCC Tacoma or Pioneer, as the case may be, executed and delivered to OCC Tacoma or Pioneer, as the case may be, the performance and observance of every obligation, covenant and agreement pursuant to this Agreement on *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 49 54 the part of the Party making such assignment to be performed or observed, it being the express intent of the Parties that this Agreement be assigned in whole and not in part (except for the obligations of OCC Tacoma set forth in Section 7.10 below which may not be assigned by Pioneer Chlor Alkali Company, Inc. or its Affiliates without OCC Tacoma's consent), and (ii) no such assignment shall have the effect of releasing such Party or any other Person (including any such additional party) from its obligations, covenants or agreements pursuant to this Agreement. Any attempted assignment in violation of this Section 7.9 or in violation of Section 7.10 shall be void and of no force or effect. For purposes of this Agreement, an assignment of this Agreement shall be deemed to have occurred if, (A) immediately following an assignment or transfer of any interest in the Site or Facility, or in Pioneer Chlor Alkali Company, Inc. or any Affiliate, PCI holds, either directly or indirectly, less than a seventy-six percent (76%) equity ownership interest in the Site and Facility, or (B) from and after the date that the Site and Facility (on a consolidated basis) constitute a majority of PCI's consolidated assets (measured as the greater of (1) the fair market value, or (2) the book value of such assets), beneficial ownership of voting interests in PCI are transferred which comprise in the aggregate a majority of all voting interests in PCI, to a group or person, whether in a single transaction or in multiple transactions. SECTION 7.10 PROPOSED TRANSFER OF ANY PORTION OF THE SITE BY PIONEER. With respect to a proposed transfer of all or any portion of Pioneer's right, title and interest in the Site or the Facility, in addition to the provisions of Section 7.9 above, Pioneer shall (a) notify OCC Tacoma of such a proposed transfer, including the identity of the proposed transferee, (b) upon entering into a confidentiality agreement with such proposed transferee in a form reasonably satisfactory to OCC Tacoma (and which agreement specifically identifies OCC Tacoma as a third party beneficiary thereof), notify any proposed transferee of the terms of this Agreement, (c) condition such transfer upon the proposed transferee's written assumption of all obligations of Pioneer under this Agreement (whether or not the proposed transferee acquires all or a portion of the Site or the Facility), (d) provide the terms of any proposed agreement assigning this Agreement or Pioneer's rights thereunder or assuming Pioneer's obligations thereunder to OCC Tacoma and OCC Tacoma Indemnified Persons, and (e) obtain OCC Tacoma's consent to the form and substance of such assignment and assumption, which consent shall not be unreasonably withheld or delayed. Notwithstanding any other provision of this Agreement, the obligations of OCC Tacoma set forth in the following Sections shall not be transferred or assigned by Pioneer Chlor Alkali Company, Inc. or its Affiliates to any Third Party, including, without limitation, any Third Party which purchases all or any portion of Pioneer Chlor Alkali Company, Inc.'s or its Affiliates' right, title and interest in the Site or the Facility, without the prior written consent of OCC Tacoma which may be withheld in its sole discretion: Sections 2.1, 2.2(a), 3.1(a), 2.6, 2.7, 2.10 and 3.5. The obligations of OCC Tacoma under Section 3.2 of this Agreement may only be assigned by Pioneer Chlor Alkali Company, Inc. and its Affiliates to a Third Party who acquires *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 50 55 Pioneer Chlor Alkali Company, Inc.'s and its Affiliates' interest in the entire Site and Facility. Regardless of any proposed transferee's acquisition of any portion of the Site or the Facility, all of the obligations of Pioneer under this Agreement with respect to the entire Site and Facility shall be transferred and the limitations on OCC Tacoma's liability (including the Early Sunset Date, Maximum Sunset Date, OCC Tacoma Aggregate Liability Limit, Physical Change Aggregate Limit and the Excluded Activity Aggregate Limit) shall apply to the entire Site and Facility, and all owners and operators thereof as though a single Person operated the Site and Facility. SECTION 7.11 HEADINGS. The Table of Contents and the Index to Schedules and Exhibits set forth in, and the descriptive headings of the several Articles and Sections of, this Agreement are inserted for convenience only and do not constitute a part of this Agreement. SECTION 7.12 COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which when so executed shall be deemed an original, but all of which together shall constitute one and the same instrument. SECTION 7.13 CONSTRUCTION. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event any ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. SECTION 7.14 INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and Schedules identified in this Agreement are incorporated herein by reference and made a part hereof. SECTION 7.15 DENIAL OF LIABILITY. This Agreement shall neither constitute, nor be interpreted, construed or used as evidence of, any admission of liability, law or fact, a waiver of any right or defense, or an estoppel by or against any Party with respect to the condition of the Site, the actual or suspected presence or Release of Hazardous Materials at the Site or elsewhere in the environment, or compliance or non-compliance with Environmental Laws at the Site or elsewhere. However, nothing in this Section is intended or should be construed to limit, bar or otherwise impede the enforcement of any term or condition of this Agreement in accordance with the provisions of this Agreement. SECTION 7.16 SEVERABILITY. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 51 56 [Remainder of page intentionally left blank] *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 52 57 IN WITNESS WHEREOF, the Parties have executed and delivered this Agreement as of the date first written above. PIONEER CHLOR ALKALI COMPANY, INC. By: /s/ Philip J. Ablove ------------------------------------- Name: Philip J. Ablove Title:Vice President and Chief Financial Officer OCC TACOMA, INC. By: /s/ John W. Morgan -------------------------------------- Name: John W Morgan Title: Vice President *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. S-1 58 ANNEX A DEFINITIONS DEFINITIONS. As used in this Agreement, the following terms have the meanings indicated (such meanings to be equally applicable to both the singular and the plural forms of the terms defined). "Administrative Order" means any binding and final administrative order issued by a Governmental Authority to OCC Tacoma or Pioneer, their respective successors or permitted assigns, or their respective Affiliates, pursuant to Environmental Laws to compel the Remediation of Hazardous Materials (including groundwater corrective action being undertaken by OCC Tacoma or its Affiliates as described in Specified Environmental Condition (a) pursuant to Part V of the RCRA Permit), to recover Response Costs therefor incurred by such Governmental Authority, to compel payment or mitigation of Natural Resource Damages, to compel the Correction of a violation of Environmental Laws, or to recover Penalties for such violation. "Affiliate" means any Person that is an "affiliate" within the meaning of the regulations promulgated under the Securities Act of 1933, as amended, as such regulations and Act shall be amended and in effect on the date of this Agreement. "Aggregate OCC Tacoma Liability" means the aggregate of Direct Cost incurred by OCC Tacoma and its Affiliates, * "Aggregate OCC Tacoma Liability Limit" means the maximum Aggregate OCC Tacoma Liability under this Agreement, and equals * . "Agreement" means this Environmental Operating Agreement, as the same may be amended in accordance with the provisions hereof. "Anniversary" means 6:30 a.m. Pacific Standard Time on a date one year after the Closing and at the same time on the dates at one year intervals thereafter. "Applicable Sunset Date" means the earlier of the Early Sunset Date or the Maximum Sunset Date for a particular Specified Environmental Condition, Identified Environmental Condition, Identified Environmental Violation, Identified Common Law Claim, Environmental Claim or Specified Condition Common Law Claim. *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. A-1 59 "Approval Letter" means, with respect to a Remediation of a Specified Environmental Condition, an Identified Environmental Condition or Correction of an Identified Environmental Violation, written correspondence from each Governmental Authority asserting jurisdiction over such Environmental Condition or Environmental Violation, or with respect to a Common Law Claim or a Remediation Claim, a final and binding order or judgment entered by a Court (other than an administrative judge or tribunal), which provides complete discharge or relief related to the Specified Environmental Condition, Identified Environmental Condition, Common Law Claim, Remediation Claim, Identified Environmental Violation, Post-Closing Environmental Condition or Post-Closing Environmental Violation or which provides that no further action is required or expressly planned at a future date as of the time of such correspondence, order or judgment to address such Environmental Condition, Environmental Violation, or Common Law Claim, but which approval may be qualified or conditioned by a Governmental Authority with respect to * "Asset Purchase Agreement" means the Asset Purchase Agreement, dated as of May 14, 1997, between OCC Tacoma and Pioneer. "Assets" shall mean those Properties, Contracts, Permits, rights, titles, interest and estates transferred by Seller to Purchaser in the Assignment and Assumption Agreement. "Assignment and Assumption Agreement" means the General Conveyance Assignment and Assumption Agreement, dated as of June 17, 1997, between OCC Tacoma and Pioneer. "Average Freight Cost" means the amount expressed in dollars per ton on a Product-specific basis as proposed by Pioneer or, upon request by OCC Tacoma, as determined by the Pioneer Accountant (subject to dispute resolution) in accordance with GAAP, to be the result obtained by dividing (a) the total actual freight charges incurred by Pioneer during the Pre-Event Period in connection with the Delivery of each Product subject to a Loss of Production, expressed in dollars, by (b) the total number of tons of such Product produced at the Facility and Delivered during the Pre-Event Period, using the books and records of Pioneer and other information requested by the Pioneer Accountant from Pioneer. "Average Price" means the amount expressed in dollars per ton on a Product-specific basis as proposed by Pioneer or, upon request by OCC Tacoma, as determined by the Pioneer Accountant (subject to dispute resolution) in accordance with GAAP, to be the average sales price, expressed in dollars per ton, actually charged by Pioneer (reduced *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. A-2 60 by applicable discounts or rebates), net of freight costs and sales, use, excise and other taxes, to Third Party customers who received Delivery of Product during the Pre-Event Period, or, in the event there are no sales to Third Party customers during the Pre-Event Period, an amount in dollars per ton approximating the then-current market price for such Product. "Average Production Cost" means the amount expressed in dollars per ton on a Product-specific basis as proposed by Pioneer or, upon request by OCC Tacoma, as determined by the Pioneer Accountant (subject to dispute resolution) in accordance with GAAP, to be the result obtained by dividing (a) the Direct Costs (plus Employee Costs with respect to any Employees who are furloughed as a result of the Loss of Production) incurred by Pioneer during the Pre-Event Period and directly related to manufacturing of each Product subject to a Loss of Production for Delivery of such Product during such period, by (b) the number of tons of such Product produced at the Facility and Delivered during the Pre-Event Period, in each case using the books and records of Pioneer and other information requested by the Pioneer Accountant from Pioneer. "CERCLA" means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, and as subsequently amended, 42 U.S.C. # 9601, et seq. "Claim Notice" means written notice by one Party to the other Party of receipt of a written Remediation Claim, Penalty Claim or Common Law Claim. "Closing" means the closing of the transactions contemplated by the Asset Purchase Agreement. "Commencement Bay" means a deep-water embayment in south Puget Sound, Washington, and includes that portion of Puget Sound enclosed by a straight line from Browns Point to Point Defiance as generally depicted on Exhibit 5 attached hereto. "Commencement Bay Nearshore/Tideflats Superfund Site" or "CB/NT Site" means the Superfund site by that name promulgated on the National Priorities List by the EPA on September 8, 1983, as generally depicted on Exhibit 6 attached hereto. "Common Law Claim" means any proceeding, suit or legal action instituted in Court, or written demand or claim asserted, with respect to the Site, the Port Property and Roadways, the PRI Property, the Upland Waste Disposal Facilities, the Hylebos Area or the Non-Hylebos Area, or operations thereon, as applicable, by a Third Party against OCC *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. A-3 61 Tacoma or Pioneer, their respective successors or permitted assigns, or their respective Affiliates, pursuant to tort or contribution causes of action under the common law (or codification thereof) of the State of Washington, or, if applicable to any of the Upland Waste Disposal Facilities, the common law of another jurisdiction, for Damages arising from Environmental Conditions or Environmental Violations. "Correction," "Correct," "Corrected" or "Correcting" means the necessary correction of an Environmental Violation imposed by a Governmental Authority or Court, * . "Court" means any court or judicial tribunal which exercises jurisdiction over the Site, the Port Property and Roadways, the PRI Property, the Upland Waste Disposal Facilities, the Hylebos Area or the Non-Hylebos Area, or the operations thereon, as applicable, pursuant to Environmental Laws (including a Canadian court or judicial tribunal to the extent it exercises jurisdiction over the Release or Remediation (if any) in Canada of Hazardous Materials (or the payment of Response Costs incurred for such Release or Remediation in Canada, or the Correction or payment of Penalties for violation of Environmental Laws occurring in Canada) arising from operations at the Site, and including a tribal court or judicial tribunal to the extent it exercises jurisdiction over the Release or Remediation (if any) on Indian lands of Hazardous Materials (or the payment of Response Costs incurred for such Release or Remediation on Indian lands, or the Correction or payment of Penalties for violation of Environmental Laws occurring on Indian lands) arising from operations at the Site). "Court Order" means a binding and final order, judgment or decree (including an interlocutory order under which performance is immediately required regardless of any appeal) issued by a Court to OCC Tacoma or Pioneer, their respective successors or permitted assigns, or any of their respective Affiliates, as a result of an Environmental Claim or a Common Law Claim, which order, judgment or decree compels, pursuant to Environmental Laws, the Remediation of Hazardous Materials, the payment of the Response Costs of such Remediation, the payment or mitigation of Natural Resource Damages, the Correction of an Environmental Violation, the payment of Penalties for an Environmental Violation, or which compels the payment of Damages in Common Law Claims. "Damages" means * . "Delivery," "Deliver," or "Delivered" means (a) with respect to a Pre- Event Period, the actual delivery of a Product produced at the Facility during such Pre-Event *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. A-4 62 Period pursuant to Documented Product Deliveries, or (b) with respect to In- Kind Replacement, the actual delivery of a Product following a Remediation Event pursuant to Documented Product Deliveries. "Direct Cost" means, with respect to an activity specified in this Agreement, the actual, documented cost, whether variable or incremental, expended for such activity, excluding any Employee Cost and any overhead or internal project management costs of a Party or its Affiliates. "Discharge" means (i) with respect to an Order, a Formal Agency Action, or an Environmental Claim, a binding and final written withdrawal, certification of completion, termination letter, settlement, discharge, release or dismissal, or (ii) with respect to a Common Law Claim or an Environmental Claim, a binding and final order, written covenant not to sue, settlement, satisfaction of judgment, judgment, release or dismissal, in either case (i) or (ii), in favor of the Parties, OCC Tacoma Indemnified Persons and Pioneer Indemnified Persons named in such Order, Formal Agency Action, Environmental Claim or Common Law Claim, * . A "Discharge" shall not occur if OCC Tacoma or its Affiliates have outstanding Remedial obligations (other than the contingent reservations described above and those provided in Sections 2.5(c) and (d) related to deed restrictions) with respect to the Order, Formal Agency Action, Environmental Claim or Common Law Claim for which it is sought. "Documented Lost Profits" means the sum of the profits on a Product- specific basis Pioneer would have realized on the sale of Products pursuant to Documented Product Deliveries to Third Party customers or to Affiliates of Pioneer but for a Loss of Production directly caused by a Remediation Event, as such amount is proposed by Pioneer or, upon request by OCC Tacoma, as determined by the Pioneer Accountant (subject to dispute resolution) in accordance with GAAP, by (a) multiplying (i) the difference between the Loss of Production of each Product and the In-Kind Product Replacement of such Product, expressed in tons, by (ii) the difference between the Average Price of such Product and the sum of the Average Production Cost and the Average Freight Cost for such Product, expressed in dollars per ton, and (b) adding the resulting amount for each Product subject to a Loss of Production. "Documented Product Deliveries" means (a) with respect to a Pre-Event Period, documented shipments by Pioneer to Third Party customers or to Affiliates of Pioneer during a Pre-Event Period of specific quantities of a Product produced at the Facility during such Pre-Event Period, or (b) with respect to a Remediation Event, quantities of a Product which would have been delivered by Pioneer to Third Parties or to Affiliates of *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. A-5 63 Pioneer but which Product was not delivered by Pioneer due to a Loss of Production directly caused by such Remediation Event. "DRP" means the Dispute Resolution Panel established pursuant to Section 6.3 of this Agreement. "dry short ton" means two thousand (2,000) pounds of 50% liquid caustic soda, basis 76% Na(2)O. "Early Sunset Date" means the earliest date on which: * . "Employee Cost" means the costs of compensation, benefits or other direct or indirect costs of employees of a Party, its successors or permitted assigns, or any of their respective Affiliates. In calculating the Average Production Costs, Employee Cost means the foregoing, but only with respect to those Pioneer employees engaged in duties directly related to manufacturing, and excluding employees engaged in corporate management, administration, sales, marketing, transportation or other duties not directly related to manufacturing. "Environmental Claim" means a Remediation Claim asserted by a Governmental Authority or Third Party or a Penalty Claim asserted by a Governmental Authority or a Third Party. "Environmental Condition" means * . "Environmental Laws" means all applicable local, state, tribal, Canadian, and federal laws, statutes, rules, regulations, Indian treaties, and ordinances (as Canadian laws, statutes, rules, regulations or ordinances may be applicable to the Release or Remediation (if any) in Canada of Hazardous Materials (or the payment of Response Costs incurred for such Release or Remediation in Canada, or the Correction or payment of Penalties for violation of Environmental Laws occurring in Canada) arising from operations at the Site, and as tribal laws, statutes, rules, regulations or ordinances or Indian treaties may be applicable to the Release or Remediation (if any) on Indian lands of Hazardous Materials (or the payment of Response Costs incurred for such Release or Remediation on Indian lands, or the Correction or payment of Penalties for violation of Environmental Laws occurring on Indian lands) arising from operations at the Site) pertaining to (a) the protection of the environment, (b) the conservation of natural resources, (c) the protection *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. A-6 64 of surface water and groundwater, or (d) the use, generation, transportation, treatment, storage, Release or Remediation of any Hazardous Material, including, without limitation, CERCLA, RCRA, the Federal Water Pollution Control Act, 33 U.S.C. Sections 1251-1387, the Clean Air Act, 42 U.S.C. Sections 7401-7671q, the Toxic Substances Control Act, 15 U.S.C. Sections 2601- 2692, the Hazardous Materials Transportation Act, 49 U.S.C. Sections 5101-5127, the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. Sections 136- 136y, the Oil Pollution Act of 1990, 33 U.S.C. Sections 2701-2761, the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. Sections 11001- 11050, the Safe Drinking Water Act, 42 U.S.C. Sections 300f to 300j-26, the Washington Model Toxics Control Act, Chapter 70.105D RCW ("MTCA"), the Washington Hazardous Waste Management Act, Chapter 70.105 RCW, the Washington Water Pollution Control Act, Chapter 90.48 RCW, the Washington Clean Air Act, Chapter 70.94 RCW, the Shoreline Management Act of 1971, Chapter 90.58 RCW, and any implementing or successor law and any final rule or regulation, binding interpretation, injunction, order, decree, or permit issued thereunder, as the same may be amended from time to time; however, notwithstanding the foregoing, this term shall exclude all laws, statutes, rules, regulations or ordinances pertaining principally to safety and health of employees or other Representatives of any Person, or principally to land use planning, zoning, subdivision, development, demolition or construction, including, without limitation, the Tacoma City Code and any applicable building, plumbing, electrical and fire codes. "Environmental Matter" means any (a) Administrative Order, (b) Court Order, (c) Environmental Condition, (d) Environmental Violation, (e) Remediation Claim, (f) Penalty Claim, (g) Common Law Claim, (h) Release subject to regulation by any Governmental Authority or under any Environmental Law, (i) proceeding before any Court or Governmental Authority arising from, or related to, any Environmental Law, (j) Formal Agency Action, (k) Identified Environmental Violation, or (l) Post-Closing Environmental Violation. "Environmental Violation" means a violation of, or noncompliance with, any Environmental Law, or permit issued pursuant to such Environmental Law, applicable to any activities, operations, events or occurrences arising from operations at the Site. "EPA" means the United States Environmental Protection Agency. "Excluded Activity" means an activity by * . "Excluded Activity Aggregate Limit" means the maximum aggregate liability of * . *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. A-7 65 "Excluded Condition Common Law Claim" means any proceeding, suit or legal action instituted, or written demand or claim asserted, by a Third Party against OCC Tacoma or Pioneer, their respective successors or permitted assigns, or their respective Affiliates, pursuant to * . "Excluded Environmental Condition" means any of the following Pre- Closing Environmental Conditions, regardless of the date on which, or whether, such Environmental Condition becomes subject to an Administrative Order or a Court Order: (a) Hazardous Materials present in surface water, groundwater, sediment, or soil in the Non-Hylebos Area; (b) Hazardous Materials Released by or on behalf of OCC Tacoma or its Affiliates at the Upland Waste Disposal Facilities; and (c) Natural Resource Damages. "Expansion" or "Expand" means to expand after the Closing the surface area of the Site (by means other than dredging) which is covered by Improvements or to move or relocate any Improvements, or to replace such Improvements existing as of the Closing, in each case with different Improvements which do not have substantially the same footprint and foundation in the same location as the existing Improvements. "Facility" means the chlor-alkali manufacturing facility located on the Site. "Force Majeure" means (i) any circumstance beyond the reasonable control of the affected Party, including: acts of God or the public enemy, fire, accident, landslide, flood, explosion, war, earthquake, drought, perils of the sea, sabotage, embargo, hurricanes, tornadoes, riots, confiscation, seizure, or closure of the Facility or the Site, by Governmental Authorities, inability to obtain, or shortage of, fuel, utilities, supplies, equipment, transportation or materials, or accident to, malfunction or breakage of Improvements, and (ii) any labor trouble, strike, walkout, lockout, or injunction (whether or not such labor event is within the reasonable control of the affected Party). "Formal Agency Action" means any formal administrative action taken in writing or formal administrative enforcement proceeding instituted in writing, or written notice, complaint, order or directive issued by a Governmental Authority (including, without *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. A-8 66 limitation, any notice of violation, notice of deficiency, demand, administrative complaint, administrative subpoena, assessment of Response Costs or Penalties or proposed order). "Governmental Authority" means any applicable federal, state, county, city, town, municipality, tribal, local, Canadian government or other political subdivision thereof and any department, commission, board, bureau, instrumentality, agency, council or other governmental entity which exercises executive, legislative, regulatory or administrative authority over the Site, the Port Property and Roadways, the PRI Property, the Upland Waste Disposal Facilities, the Hylebos Area or the Non-Hylebos Area, or the operations thereon, as applicable, pursuant to Environmental Laws (as a Canadian government entity may be applicable to the Release or Remediation (if any) in Canada of Hazardous Materials (or the payment of Response Costs incurred for such Release or Remediation in Canada, or the Correction or payment of Penalties for violation of Environmental Laws occurring in Canada) arising from operations at the Site, and as a tribal government entity may be applicable to the Release or Remediation (if any) on Indian lands of Hazardous Materials (or the payment of Response Costs incurred for such Release or Remediation on Indian lands, or the Correction or payment of Penalties for violation of Environmental Laws occurring on Indian lands) arising from operations at the Site). "Hazardous Material" means any "hazardous substance" or "hazardous waste" as defined, identified or listed as of the Closing in any Environmental Laws in effect as of the Closing, and includes, solely for purposes of this Agreement, any radioactive substance, pesticide, petroleum product, crude oil or any fraction thereof, and asbestos in friable form (other than asbestos in the chlor-alkali cells). "Hylebos AOC" means the Administrative Order on Consent for Pre- Remedial Design Study, dated November 29, 1993, among the EPA, OxyChem and five other designated PRPs to perform certain Remediation in the Hylebos Waterway of the CB/NT Site, as modified or amended. "Hylebos Area" means the Hylebos Waterway and that portion of the CB/NT Site which includes (a) the geographic area addressed by the Hylebos AOC (including the Head of the Hylebos Waterway and the Mouth of the Hylebos Waterway areas), (b) any area where Remediation is subsequently conducted as a consequence of the pre-remedial design work performed under the Hylebos AOC, and (c) any area of the CB/NT Site or Commencement Bay where Hazardous Materials from the Hylebos Waterway have been deposited or otherwise have or will come to be located as a result of transport caused by tidal action, flow of water, erosion, leaching or other natural migration. *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. A-9 67 "Hylebos Area Common Law Claim" means a * . "Hylebos Waterway" means the waterway adjacent to the Site. "Identified Common Law Claim" means any proceeding, suit or legal action instituted, or written demand or claim asserted, by a Third Party against OCC Tacoma or Pioneer, their respective successors or permitted assigns, or their respective Affiliates, pursuant to * . "Identified Environmental Condition" means any Pre-Closing Environmental Condition, excluding any Specified Environmental Condition, which is * . "Identified Environmental Violation" means * . "Improper Treatment System Operation" means * . "Improvement" means any machinery, equipment, building, structure or improvement located at or in the vicinity of the Site and used either by Pioneer in the operation of the Facility or other operations of Pioneer on the Site or by OCC Tacoma or its Affiliates or Representatives in connection with Remediation or Correction or an Excluded Activity. "Indemnified Group" means all Indemnified Persons seeking indemnification for an individual Indemnity Claim against one Party or the other Party. "Indemnified Person" means the Person seeking defense or indemnification under this Agreement, and is either an OCC Tacoma Indemnified Person or a Pioneer Indemnified Person, as applicable. "Indemnifying Party" means the Party from whom defense or indemnification is sought under this Agreement, and is either OCC Tacoma or Pioneer, or their respective successors or permitted assigns, as applicable. "Indemnity Claim" means a claim by one Party to the other Party seeking defense or indemnification pursuant to Article III and IV hereof. "Indemnity Notice" means a written notice by one Party to the other Party of an Indemnity Claim. *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. A-10 68 "Information" means information any of any kind concerning (a) the past and present assets, business, operations, liabilities or property of OCC Tacoma or its Affiliates, other than the Assets or the Facility, (b) the transactions contemplated by this Agreement, or (c) any Environmental Conditions, Environmental Violations, Environmental Claims or Common Law Claims, in each case obtained from any other Party or any of its Affiliates or Representatives. "In-Kind Consideration" means the amount expressed in dollars on a Product-specific basis as proposed by Pioneer or, upon request by OCC Tacoma, as estimated in advance and subsequently confirmed by the Pioneer Accountant (subject to dispute resolution) in accordance with GAAP for OCC Tacoma providing any In-Kind Replacement for a Loss of Production, to be (a) the In- Kind Product Replacement of a Product subject to a Loss of Production multiplied by (b) the sum of (i) the Average Production Cost of such Product and (ii) the actual freight cost per ton (reduced by applicable discounts or rebates) that would have been incurred by Pioneer in Delivering Product to specific Third Party customers or Affiliates of Pioneer receiving In-Kind Product Replacement, as determined, if available, by the Average Freight Cost to such specific customers or Affiliates during the Pre-Event Period, using the books and records of Pioneer and other information requested by the Pioneer Accountant from Pioneer. "In-Kind Product Replacement" means the number of tons of a Product Delivered or to be Delivered by OCC Tacoma or its Affiliates, in accordance with this Agreement, in partial or total replacement of a Loss of Production resulting from a Remediation Event, as reasonably directed by Pioneer to Third Party customers or to Affiliates of Pioneer serviced from the Facility pursuant to Documented Product Deliveries prior to such Remediation Event, and which may be provided by OCC Tacoma in lieu of Documented Lost Profits. "Knowledge of OCC Tacoma" means the knowledge of the officers and key employees of OCC Tacoma or its Affiliates identified on Schedule 2 attached hereto. "Loss of Production" means the documented reduction, whether partial or total, on a Product-specific basis, in the number of tons of a Product produced by the Facility for Delivery pursuant to Documented Product Deliveries to Third Party customers or to Affiliates of Pioneer, which reduction is directly caused by a Remediation Event, as such number of tons is proposed by Pioneer or, upon request by OCC Tacoma, determined by the Pioneer Accountant (subject to dispute resolution) and measured by the extent to which (a) actual daily production of such Product by the *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. A-11 69 Facility for Delivery during the Remediation Event in tons is less than the average daily production of such Product by the Facility for Delivery during the twelve (12) calendar months next preceding the calendar month in which the Remediation Event occurs; provided, however, that such reduction of the number of tons of Product produced shall not include any such reduction caused by or resulting from actions or events, voluntary or involuntary, taken by or happening to Pioneer, whether before or after the Remediation Event, including Repair or Expansion and Improper Treatment System Operation, but excluding any Excluded Activities and Treatment System Operation (other than Improper Treatment System Operation). "Material Adverse Effect" means, with respect to any Person, asset or operation, any set of circumstances or events which in the aggregate would constitute, or cause a material adverse effect on such asset or operation and in the case of any Person, its condition, financial or otherwise, or on the ability of such Person to perform its obligations under the transactions contemplated pursuant to this Agreement. "Material Compliance" means compliance in all material respects with an applicable Order (or, with respect to a matter subject to indemnification pursuant to Article III for which no Order is issued, with a Formal Agency Action) as determined by the applicable Governmental Authority with jurisdiction over such Order (or, as applicable to indemnification as noted in the preceding parenthetical, a Formal Agency Action) and including compliance with the least stringent standards of any permit or Environmental Law applicable thereto, subject to * . "Maximum Sunset Date" means the following: (a) The thirtieth (30th) Anniversary for * ; (b) The twenty-fourth (24th) Anniversary for * ; (c) The twenty-fourth (24th) Anniversary for * . "Natural Resource Damages" means * . "Neutral Accountant" means a qualified accounting firm selected by the Pioneer Accountant and the OCC Tacoma Accountant pursuant to Subsection 6.3(e) of this Agreement. "Non-Hylebos Area" means that portion of the CB/NT Site and of Commencement Bay excluding the Hylebos Area. This term includes the Ruston Shoreline Study Area, the City Waterway, the Wheeler-Osgood Waterway, the Middle Waterway, the St. Paul *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. A-12 70 Waterway, the Sitcum Waterway, the Blair Waterway and any portion of the Nearshore or Tideflats areas not impacted by tidal action, flow of water, erosion, leaching or other natural migration from the Hylebos Waterway. "OCC Tacoma" means OCC Tacoma, Inc., a Delaware corporation, its successors and permitted assigns. "OCC Tacoma Accountant" means Arthur Andersen, LLP, or such other nationally recognized accounting firm as shall be selected by OCC Tacoma. "OCC Tacoma Indemnified Persons" means OCC Tacoma and its Affiliates, successors and permitted assigns, and their respective Representatives. "Order" means an Administrative Order or a Court Order. "Order Notice" means written notice by one Party to the other Party of receipt of a written Order or Formal Agency Action. "OxyChem" means Occidental Chemical Corporation, a New York corporation. "Party" means Pioneer or OCC Tacoma, as applicable, and "Parties" means Pioneer and OCC Tacoma. "PCI" means Pioneer Companies, Inc., a Delaware corporation. "Penalty" or "Penalties" means administrative, civil or criminal fines or penalties, including stipulated penalties but excluding punitive or exemplary damages, imposed by a Governmental Authority or a Court pursuant to Environmental Laws. "Penalty Claim" means a Formal Agency Action, a proceeding, suit or legal action instituted in Court by a Governmental Authority or Third Party, or a written demand or claim asserted by a Governmental Authority or Third Party, in each case after the Closing against OCC Tacoma or Pioneer, their respective successors or permitted assigns, or their respective Affiliates, pursuant to Environmental Laws, regarding the Correction of a violation of Environmental Laws, or to recover Penalties for such violation. "Permits" means the authorizations, consents, approvals, registrations, permits or certifications, in effect immediately prior to the date of this Agreement, and which impose any present or future obligations, issued pursuant to Environmental Laws by a *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. A-13 71 Governmental Authority with respect to the operation of the Site and the Assets, as such Permits are identified on Schedule 3 attached hereto. "Person" means any natural person, corporation, limited liability company, partnership, group, joint venture, trust, PRP Group, association or other business enterprise or organization or any Governmental Authority or any other entity. "Physical Change Aggregate Limit" means * . "Pioneer" means Pioneer Chlor Alkali Company, Inc., a Delaware corporation, its successors or assigns, in each case as approved and permitted under Sections 7.9 and 7.10. "Pioneer Accountant" means Deloitte & Touche, LLP, or such other nationally recognized accounting firm as shall be selected by Pioneer. "Pioneer Indemnified Persons" means Pioneer and its Affiliates, successors and permitted assigns, and their respective Representatives. "Port Property and Roadways" means real property owned as of the date hereof by the Port of Tacoma and roadways of the City of Tacoma and/or Pierce County (including Alexander Avenue), all located to the plant north and plant west of the Site. "Post-Closing Environmental Condition" means an Environmental Condition caused by a Release which occurs after the Closing. "Post-Closing Environmental Violation" means any violation occurring after the Closing, whether or not such violation also existed prior to or as of the Closing of (a) any Environmental Law or (b) any permit or Order issued thereunder, in either case, arising from or related to the operation of the Site, which violation is the subject of a Formal Agency Action or Order. "Pre-Closing Environmental Condition" means an Environmental Condition caused by a Release which occurred prior to the Closing. "Pre-Event Period" means the twelve (12) months next preceding the calendar month in which a Remediation Event occurs which directly causes a Loss of Production. *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. A-14 72 "PRI Property" means that certain real property located adjacent to the southern boundary of the Site owned as of the date hereof by PRI Northwest, Inc., as described in Exhibit 7 attached hereto. "Products" means liquid chlorine, muriatic acid and calcium chloride in units of short tons, caustic soda ("NaOH") in units of dry short tons produced by Pioneer following the Closing and during the Pre-Event Period for delivery to Third Party customers or shipment to Affiliates of Pioneer. "Project Manager" means a Representative of a Party designated by that Party for consultation pursuant to Article V of this Agreement. "PRPs" means potentially responsible parties identified as having potential liability or responsibility with respect to an Environmental Condition. "PRP Group" means a group of Persons that performs Remediation of Environmental Conditions and/or pays to a Governmental Authority or a Third Party the Response Costs therefor, in each case pursuant to Environmental Laws. "RCRA" means the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 and the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. Sections 6901-6992k. "RCRA Permit" means Permit No. WAD009242314, effective as of November 16, 1988, issued pursuant to RCRA by Region 10 of the EPA and the Washington State Department of Ecology, as modified and amended. "Related Agreement" means: (a) the Asset Purchase Agreement (b) the Assignment and Assumption Agreement (Richmond), (c) the Assignment and Assumption Agreement (Wilmington), (d) the Bargain and Sale Deed, (e) the Chlorine and Caustic Soda Sales Agreement, *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. A-15 73 (f) the Chlorine Purchase Agreement, (g) the Conveyance Instrument, (h) the Environmental Easement, (i) the Interim Services Agreement, (j) the OCC Guaranty, (k) the Richmond Product Exchange and Terminal Services Agreement, (l) the Wilmington Product Exchange and Terminal Services Agreement, (m) any other document required to effect the Conveyance and executed and delivered at the Closing, and (n) the Purchaser Guaranty. "Release" means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, leaching, dumping, or disposing of Hazardous Materials or other substances or materials into the atmosphere (excluding indoor air), onto or into the soil or sediment, or into groundwater or surface water, excluding migration. "Remediation," "Remediate," "Remediated" or "Remediating" means * . "Remediation Areas" means * . "Remediation Claim" means a Formal Agency Action, a proceeding, suit or legal action instituted in Court by a Governmental Authority or Third Party, or a written demand or claim asserted by a Governmental Authority or Third Party, in each case after the Closing against OCC Tacoma or Pioneer, their respective successors or permitted assigns, or their respective Affiliates, pursuant to Environmental Laws, regarding the *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. A-16 74 Remediation of Hazardous Materials, the recovery of Response Costs incurred by a Governmental Authority or Third Party, or the payment or mitigation of Natural Resource Damages. "Remediation Damages" means * . "Remediation Event" means any Remediation activity conducted by OCC Tacoma, its successors, assigns or Representatives at the Site or in the Hylebos Area, the PRI Property or the Port Property and Roadways at any time or from time to time which * . "Repair" means repair and maintenance activities, excluding dredging, necessary to the continued operation of the Assets and the replacement of Improvements at their existing locations and which have substantially the same footprint and foundation, each as conducted in the ordinary course of the operation of the Facility. "Representative" means any director, officer, employee, agent, accountant, legal counsel, contractor or other representative of a Person acting on such Person's behalf (whether or not the actions exceed the scope of representation), excluding a PRP Group; provided, however, that one Party or its Affiliates shall not be considered or deemed to be a Representative of the other Party or its Affiliates. "Response Costs" means * . "Scheduled Remediation Event" means a Remediation Event for which prior notice is given by OCC Tacoma to Pioneer. "short ton" means two thousand (2,000) pounds. "Site" means that certain real property as described on Exhibit 8 attached hereto which shall be deemed to include any dock or docks located on or appurtenant to such real property. "Specified Condition Common Law Claim" means any proceeding, suit or legal action instituted, or written claim or demand asserted, by a Third Party * . "Specified Environmental Condition" means one of the Pre-Closing Environmental Conditions described below: * . *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. A-17 75 "Subsidiary" means, with respect to any Person, any corporation, association, partnership or other business entity, a majority (by number of votes) of the Voting Securities of which is at the time owned by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries. "Third Party" means any Person, including a PRP Group or any of its members, that is not (a) a Party; (b) a successor to or permitted assign of a Party; (c) an Affiliate of any of (a) or (b); (d) a Representative of any of (a), (b) or (c); or (e) a Governmental Authority. "tons" means short tons with respect to chlorine, muriatic acid and calcium chloride, and dry short tons with respect to caustic soda. "Treatment System" means the groundwater treatment facility used to Remediate the Specified Environmental Condition described in paragraph (a) of the definition of Specified Environmental Condition, including, without limitation, the groundwater monitoring, injection and extraction wells, steam distillation treatment system, carbon treatment system, solids handling system, control room, sampling devices and equipment and associated support buildings, structures, equipment and piping. "Treatment System Operation" means the operation of the Treatment System. "Underlying Claim" means a Remediation Claim, Penalty Claim, Common Law Claim, Formal Agency Action, Administrative Order or Court Order, as applicable. "Unscheduled Remediation Event" means a Remediation Event for which prior notice is not given by OCC Tacoma to Pioneer. "Upgrade" means any increase in production capacity or other upgrade of the operational capability of the Facility as compared to such capacity or capability immediately prior to a Remediation Event, as a direct result of the repair, moving, relocation or functional replacement of any Improvement required by such Remediation Event. "Upland Waste Disposal Facilities" means * . *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. A-18 76 "VOCs" means the following volatile organic compounds: methylene chloride, 1,2 trans-dichloroethylene, trichloroethylene, 1,1,2,2 tetrachloroethane, tetrachloroethylene, carbon tetrachloride, 1,1 dichloroethylene, chloroform, 1,1,2 trichloroethane and vinyl chloride. "Voting Securities" means stock or other equity or voting interests of any class or classes (however designated), the holders of which are at the time entitled, as such holders, to vote for the election of a majority of the directors (or persons performing similar functions) of the corporation, association, partnership or other business entity in question, other than stock or other equity or voting interests having the right to vote solely by reason of the happening of a contingency. * * *CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. A-19 -----END PRIVACY-ENHANCED MESSAGE-----